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Suppose a person is generally happy with their home, but learns of a house for sale in a desirable location that would be a dream home. He crunches the numbers and realizes he can afford the new house if and only if he can sell his current house for at least X and buy the new house for at least Y. If he can't meet those parameters, he doesn't want to sell his own house or look at additional properties.
Could this work? How? What does the timeline look like in terms of listing the house, making an offer, etc?
Most sellers won't even take an offer, IF it contains a clause basing it on the sale of YOUR house first. A desirable house is likely to sell too quickly with offers that don't have many weasel clauses.
Plus, buyers will only pay what the house is worth in the market at that point. That may or may not be "what I need for X".
Could it work? Sometimes, maybe, just not very likely.
Really depends on whether the crunched numbers are realistic. Are they reasonable numbers, or are you counting on a silly high offer on your place and a lowball bargain on the new one?
Don't count on being able to get the other buyers and sellers to agree to your very particular contingencies. Sometimes you just have to take a leap of faith and do it.
I know you can make offers to buy contingent on the sale of your own home. Is this the only way it could work?
No, you can sell your house first, bank the money, and then look for the other house and buy it. Then you don't need that contingency in your sales contract.
Meanwhile, you could live in a van down by the river, lol.
I know you can make offers to buy contingent on the sale of your own home. Is this the only way it could work?
Well, that's exactly what it is, right? It's just another way of saying that you can't afford the new property unless you sell your current one (many people are in that boat.)
But there are risks.
The sellers will often have a clause that protects them and allows them to force you out of the sale if another bid comes along. (The wording basically allows them to force you to close sooner.) And they won't wait on you indefinitely; you'll be up against the closing date.
Anyway, it's not unheard of BUT
-in a strong seller's market, the seller will probably take an offer with fewer contingencies and a shorter close
-in a strong buyer's market, you may struggle to sell your home on the timetable you need
The way I see it, here are the risks with your hypothetical:
-Getting seller to agree to a contingency. This is a huge unknown for the seller. It may work if the seller needs a delayed closing and can be assured that your house will sell quickly. In a hot market, this is unlikely to happen because there will be a better offer.
-Getting the right price for the property being sold. Does the property comp out at the price needed to afford the new house or is it a bit of a stretch? If the house it priced too high, it won't sell. The key here it to sell the home quickly. That often means pricing slightly below market.
Okay, tangential question: If someone wants to move up in a seller's market, how should he time it?
Make an offer on a house and then list his own once the offer is accepted? Or do people sell their house first and hope they can then find something quickly?
Suppose a person is generally happy with their home, but learns of a house for sale in a desirable location that would be a dream home. He crunches the numbers and realizes he can afford the new house if and only if he can sell his current house for at least X and buy the new house for at least Y. If he can't meet those parameters, he doesn't want to sell his own house or look at additional properties.
Could this work? How? What does the timeline look like in terms of listing the house, making an offer, etc?
Depends solely on the motivations of the seller. If you have a seller who is only interested in bottom line, then no, they probably won't deal. If you have a seller who isn't in a hurry to sell, and is willing to wait until THEY find a house, then you might be able to craft a deal. But as a seller, I would probably not take your offer unless your house was under contract.
Okay, tangential question: If someone wants to move up in a seller's market, how should he time it?
Make an offer on a house and then list his own once the offer is accepted? Or do people sell their house first and hope they can then find something quickly?
In a sellers market, CASH is king with no or very few contingencies.
Some people even pay OVER the listed price to get the deal! It just depends on the market at that time, and the location for desirability.
You can't usually realistically make a deal, and THEN make it contingent on the sale of your own house, people just won't wait on that uncertainty.
As you've now been told multiple times in this thread, it's just not easy to get sellers to accept that sort of deal, if their house is a good deal to many people.
Does it happen now and again? YES, sometimes when everything aligns just right.
You can sell first, and figure out some sort of temp living arrangements while you are looking for "the house". Have your cash stashed where it's easy to get very quickly, and make your offer CASH, with only a simple inspection as contingency. I don't recommend you make any deal without at least that contingency as the very minimum.
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Are they reasonable numbers, or are you counting on a silly high offer on your place and a lowball bargain on the new one?
