You may think that listing your home in the midst of a world wide pandemic is a bad idea. However, there are actually quite a few good reasons why now is a great time to sell your home. Although many home owners are weary about buyers entering their homes at this time, there are a variety of strategies that can be used to mitigate these concerns. Furthermore, if you do want to sell your home in the near future, you may benefit from these unique market conditions.
Less Looky Lous
Traditionally when you are selling your home, it’s not uncommon to have what we refer to as “looky lous” coming through your home. These buyers are not very motivated, and they may not even really be interested in buying at all. A looky lou could even be a nosy neighbor. In short, this type of buyer is really just looking at your home and is not seriously considering purchasing it. Right now, there are far fewer looky lous. The buyers that are actively looking at homes are incredibly motivated. They are going out of their way to view homes, and buyers and agents are taking time to make sure the home is a serious contender before physically viewing the home. When I am working with buyer clients these days, we begin by looking at the home online together. We look at all of the photos, read all of the disclosures, look at the home from google street view, and we make sure it has a good chance of working for his or her needs before we visit the home in person. If we get to the property and notice it won’t work for the buyer’s needs from the exterior, we don’t go inside. In short, the buyers that are sporting gloves and masks, and signing Covid-19 disclosures before seeing a home are qualified and motivated. These buyers are serious.
In Austin, Texas it has been a seller’s market for a long time. There are not enough homes to meet the demand of buyers. However, the pandemic has only exacerbated this issue. Many individuals who were planning to list their homes have decided to wait to list when it’s safer. Others feel they simply can’t market their home with everyone living in it 24/7. Some people who had their homes on the market took them off the market when the pandemic hit. All of these factors result in less housing supply. If you list your home today, you are competing with fewer homes, and when supply goes down, price goes up.
Less Time on Market
Real estate agents use the term ADOM to refer to the average days on market for a particular listing. Single family houses in the City of Austin had an average days on market of 23 last month. In comparison the ADOM for homes in the City of Austin in April of 2019 was 32. Homes are spending less time on the market. As a seller, this is good news for you. Less time on market means less time living in limbo. Less time on market means less time hiding all of your random stuff in closets and under the bed. Less time on market means less time paying utilities, a mortgage, and taxes on the property you are selling.
If you are on the fence about listing your home right now, consider these advantages. Although there may be a risk to selling your home under the current conditions, there are a variety of ways to mitigate these risks, and there are quite a few unintended benefits to selling during a pandemic. If you have questions about listing your Austin area home for sale, contact me today.
Which comes first, the sale or the buy? Navigating buying a new home when you need to sell your current home at the same time.
If you are fortunate enough to be able to purchase a new home without selling your current home first, this post is not for you. However, if your financial situation requires that you must sell your current residence in order to purchase another one, you may be wondering how this is logistically possible. First off, this type of transaction is known as a contingent offer in real estate language. The offer you make on a new home is contingent on the sale of your existing house, and there are a few different ways you can make this type of move.
One way to purchase a new home and sell your current home is to simply schedule both closings for the same day. You could sell your home in the morning, and then close on your new home the same afternoon. However, there are a few challenges with this particular method. First of all, you’re going to need to move all of your belongings out of your home and you should have it cleaned for the new occupants. Any savvy buyer is also going to want to do a final walkthrough before the closing. So, you would need to ensure all of your belongings are in the moving truck and the home looks presentable before the buyer does the final walkthrough. Is this doable? Yes, but it may not be pretty. Afterwords, you would need to sign all of the paperwork for the closing of your new home and wait for the lender to fund the purchase. Only, then could the moving truck deliver your possessions to your new home. Lastly, it’s not unheard of to have unexpected delays on either the buy or the sell side. Say the couple purchasing your home runs into unexpected financing issues that delay the sale of your current home a few days, you would need to amend the contract for your new home purchase by a few days too. In this scenario, you would hope that the seller of your new home agrees to the delay, but they don’t have to sign an amendment extending the closing date. You could be left in a very tricky situation.
Another option is to negotiate a seller lease back in the terms of the contract for the sale of your current home. A seller lease back allows you (the seller) to close on the sale of your home, and then lease back your home from the buyers for up to 90 days. You can negotiate the exact terms of the lease, but expect to pay something for this lease and potentially include a security deposit too. A seller lease back can be for as short as only a few days, too. If you have a short seller lease back, you would need to already have an offer in on another home that is contingent on the sale of your existing residence. A short lease back allows for a little more wiggle room with moving opposed to the same day double closing. A long seller lease back could be used when you haven’t even identified a new home yet. If you closed on your home with a 90 day lease back, you would have approximately 60 days to go under-contract on a new home, and you would be able to put in an offer that was not contingent on the sale of your current home since you would have already sold it. A contingent offer is often viewed as less strong than an offer that is not contingent. Thus, in a strong sellers market, closing on the sale of your home first with the temporary residential seller’s lease may be your best option to secure a new home.
A third option when trying to sell your current home and buy another one is to simply sell your current home, and then buy later. You could sell your home and then move all your possessions into storage and huff it out in a hotel while you look for your next home. You could go stay with family or friends. You could rent an apartment for a few months. All of these possibilities could work, but they would essentially involve moving twice.
Lastly, you could make an offer on a new home that is contingent on the sale of your existing home and involves a buyer’s temporary residential lease. This is similar to the seller’s temporary residential lease I outlined earlier, but it’s opposite. You would be leasing the home from the sellers before you purchase the home. This may be a good option if you can’t live in your home and allow showings at the same time. However, this method is also risky. What happens if you can’t sell your home or you suddenly lose your job and no longer can actually purchase the home you are now renting? Remember I said this lease was temporary. The buyer’s temporary residential lease is only to be used for a maximum of 90 days, and you are under-contract to ultimately purchase the home too. If something unexpected happened during those 90 days you could be forced to move back into your old home.
Ultimately, which method you decide to use to sell your existing home and buy a new one is up to you and will largely be based on your individual situation and the market conditions. If you have questions about the best strategy to use in your next move, feel free to contact me.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.