It’s hard enough waiting for the bank to approve a loan, but the agony of buying a house can be exacerbated when the sale’s progress is delayed because the buyer is waiting for his own property to sell. Unfortunately, many sales are reliant on this vital component and although some people wait until their property is sold before looking for another, others simply don’t have the luxury of this option.
While everyone agrees that we are currently in a buyer’s market, any sale that is subject to the sale of another house is not always welcomed by the seller. There is a good reason for this. Once a contract of sale has been signed it is a binding agreement and one that neither the buyer nor the seller can easily get out of. When a sale is reliant on the actions of another party, there are a number of factors that sellers often need to take into consideration before accepting the deal – regardless of how much more money is on the table.The amount that a buyer is willing to pay for a property will always influence the deal. However, buyers who are attempting to buy a property, but can’t do so without selling their existing property first are not necessarily in the best position to bargain.
Much depends on whether a seller is willing to accept the terms of the sale and the urgency of the sale can be a major deciding factor. Very often a buyer will overprice his own property in a bid to match the purchase price of the new property. It goes without saying that overpriced homes are not selling in the current market. Another aspect that can put a spanner in the works is if the seller has already had a deal that has soured because the previous buyer was not able to sell his property in time to proceed with the subsequent purchase. It stands to reason that in this instance it is a case of once bitten twice shy and it is extremely unlikely that the seller will be accept a similar offer with the same conditions.
There are, however, ways to ensure that both properties are sold timeously. Pricing a home to sell is a no brainer under these circumstances. This is not the time to become unrealistic as to how much your home is worth. Considering all reasonable offers and weighing up the pros and the cons before rejecting them outright is also recommended.
Ensuring that the property is well maintained and in showroom condition before it is placed on the market is vital. Keeping the home in pristine condition while it is on the market is equally as important. Buyers make snap judgements and viewing an untidy, cluttered home does not leave a good impression in most instances.
While most would agree that buying a home before they are in a position to pay for it is not ideal, very often the situation presents itself (such as a job transfer) and the buyer is caught off guard. More often than not, the buyer has a plan of action in place. He will put his home on the market, sell it and then find a new home to live in. Unfortunately, human nature dictates that most of us will start to look for a new nest from the moment our house goes on the market. It’s Murphy’s law that the buyer will find the ideal home when he isn’t really geared up to sell his existing home. Eager not to miss out on the deal, he will make an offer to purchase, subject to selling his own home. The race is then on to ensure that his own property is sold within the time period agreed upon by both parties.
Both parties have to be realistic under these circumstances. Property is undoubtedly staying on the market for longer – regardless of how well priced the home may be. Giving someone 30 days in which to sell a home is unrealistic. A time period of 60 to 90 days is far more acceptable; however, if a seller is concerned about committing to the extended time period he should consider asking his agent to insert an ‘out clause’.
An out clause protects the seller as it allows him to cancel the sales contract in the event that he receives a matching or higher offer on the property. In many ways this is the ideal scenario as it protects the seller by ensuring that although he may have accepted an offer, he has not closed the door on other offers and in actual fact can use the initial sales contract as leverage in other deals to ensure that he gets the best price for his home.