How to buy when you also have to sell

The market is full of people who know they can sell their old house in a heartbeat, but are worried that they won’t be able to find a house to buy…..so they do nothing.

Here are a few options for you:

IF you absolutely have to make an offer contingent on selling your old house, have the old one ready to list as soon as you make an offer.  The listing agent for the house you want to buy will want to see it on the market ASAP.  Many people focus on finding the right house and have done no prep work on their old house.  They often end up losing their new house.  Any decent agent will counter your offer with what is called a “Kick-out Clause.”  That means that if another buyer comes along without a contingency, you either need to step aside or remove your contingency and buy the house.  If your house isn’t ready to list, or isn’t appealing enough to sell immediately, odds are you will lose your new house.  I know it is tough, but the best thing to do right now is focus on getting your old house ready to sell, THEN go look at houses.  And every client I have in this situation is going to think I am talking to them when they read this, but I am talking to ALL my clients in this situation 🙂

The absolute best thing to do when you need to sell first is to…..just sell first.  Yes, I mean sell your old house and find somewhere to live temporarily.  Will it be fun?  Heck no, but you will get top dollar for your old house and be in the best bargaining position on the new one since no seller today really wants to accept a contingency offer.  If a seller accepts one, it is usually a sign that you are paying waaaay more than the next highest bidder and/or that you have selected a house that is having trouble selling in the hottest market ever.  Neither of those are good.

IF you can buy the new one without having to first sell the old one, then do that.  You know you will sell the old one quickly and it is really nice to be able to get the new one ready before moving in.

But what if you can qualify for the new house without having to sell, but you really want or need your equity from the old one for a down payment?  Easy.  Get a home equity line of credit on your old one and use it for the down payment on the new one.  Sell the old one and pay it off.  It’s a simple way of moving the equity you have from the old house to the new one.

I am Superman, and I can do anything

“Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings in a single bound!”

Know who I am talking about here?  Not Superman.  I am talking about how every realtor perceives themselves.  I know because I have watched all their videos on how to choose an agent.  They say things like:

“I sold that house the first day on the market” at a time when they all sell fast.

“My team sold 30 million dollars of real estate last year” and since there are 5 agents, that means 6 million each, which isn’t that exciting.

“I have a unique marketing plan that sells houses faster and for top dollar” which would be really impressive if all houses were not selling fast and for top dollar.

“I specialize in residential, commercial, farm and investment property.”  Ok….so you specialize in EVERYTHING?

I get it.  We are all in business.  You have to self promote.

Want to know what I say?

There are many great agents out there and many more who are not.  I may be the ideal fit for you.  I may not be, and that is okay.  I once had a buyer who was interviewing agents.  I didn’t think it was going that well so I gave him the names of a few agents that I knew would take care of him.  He ended up picking me, but for a while there I didn’t think I stood a chance.  If he wasn’t going with me, I wanted him to have somebody good. That’s just the right thing to do.

So, who am I?  Probably more like Clark Kent than Superman.

I am a realist.  I am not afraid to tell you what I think.  I like to think through all your options and help you make the best decision possible.  I point out things I think you may not have noticed or thought about.  I have a lot of experience.  Nearly all of my work is repeat clients or referrals from past clients or friends.  I am not greedy.  I don’t take on more work than I can handle.  I want to give you my best and enjoy the time I spend helping you.

 

 

Want to know what BUGS me about a house?

You know what scares me when I see a house for sale and the seller has lived in the place for a very long time?

Termites.

For most people, the only time they think about getting termite inspections are when there is a sale involved.  While I don’t think you need annual inspections unless you just want to help your pest inspector generate revenue, you should do one at least every few years.

I was in a house last weekend that my buyer is considering making an offer on.  Well, I guess they are still interested.  I haven’t heard from them since I pointed out all the termite damage.

And there was a lot of damage.  Fortunately most of it would be easy to fix.  All you’d need is to sister a few new joists to old ones.  The damage didn’t look any higher than that.  I figure there is about $2-3k in work to be done.  A termite treatment back in the 90s would have been much cheaper.

As the husband and I were walking around in the basement using our phones to look at all the joists, he said “This is why we like you.”

Who knows if they will make an offer on this house.  If this isn’t the one, no worries.  I know I am their realtor.  I want to sell them the right house, not just any house.

 

It’s like the most boring baseball game ever

I have always said that first time buyers grease the real estate market.  Not that I’ve played much baseball since I was a kid, but I always pictured the market this way:  The bases are loaded with people who needed to buy and sell, then a first time buyer hits a home run and lets everybody else move.  Being the person who didn’t have anything to sell kept the market moving.

That wonderful analogy that I have been using my entire career doesn’t work any more.

First time buyers are struggling to get a house.  The person on first base can’t find their second base house, the second base person can’t find their third base house, etc.  They know selling their old house will be easy, but they dread the thought of being a buyer right now.  So they stay put….and that first time buyer keeps striking out.

Now that I think about it, being a realtor feels just like when I went on a 7th grade field trip to see the Reds play.  There was a lot of waiting for something to happen, and then a brief moment of excitement.  That is how the market is today.  A lot of waiting.  A lot of checking for new listings.  A lot of networking to find houses not on the market yet.  Then when a house that meets your buyer’s criteria hits the market, a lot of excitement.

How I won in multiple offers

I was working with a client for several months who was buying in Nicholasville.  The market there is even worse than it is in Lexington for a sub $200k buyer since there are only about 8 neighborhoods to choose from.

A great house came on the market.  I scheduled a showing.

I just knew this would be the one.  I checked out the recent sales in the neighborhood to get an idea about what this house was worth.  I even prepared all the docs my buyer would need to sign so we would be ready to go.  All I needed to do was fill in the offer price and have her sign it from her phone.

We looked at the house.  It was a winner.  I call to tell the listing agent that I just sent an offer and was told that there was already one offer on the table and another one was coming.

We revised our offer to be slightly over the list price.  I asked all my usual questions that can help with getting an offer accepted……When would the seller like to close?  Do they need delayed possession?  Would they like the inspection type where the buyer either takes it or leaves it after the inspection?  Other than price, what would the seller’s ideal offer be?

The seller didn’t need anything special, so I knew this one would come down just to price.

A few hours later I get a call telling me that the third offer arrived and it had an escalation clause.  That made me pretty nervous.

I tell my buyer this and suggest we also do an escalation clause.  I tell her that the default setting for most agents is to offer $1000 more than the highest offer, so we better do more.  Otherwise all we would accomplish was knocking out the third buyer.

She agreed to a number we discussed and that she would pay that much higher than any offer up to certain price.  The list price was $192,900 and all the offers were higher than that.

I was a nervous wreck all day.  I really wanted to see my buyer get this house.  It was perfect for her and she had been waiting so long to get a house.

Finally, I get the call that she won the house.  Turns out all the offers were $194k, and the other offeror’s escalation clause was the predictable $1000 that I suspected.

It was sort of funny for me because it was the first time I had ever called to tell a buyer they had just bought a house and they didn’t yet know what they were paying for it.  I tried to make her guess, you know, like she was a contestant on The Price is Right, but she was so anxious that she said “JUST TELL ME THE PRICE!!”