Selling your home before you have a new one

[Aerides]

My parents have narrowed down their "next home" choices to two neighborhoods, but have yet to find the ideal lot/house come available. But over the past 60+ days, the right houses haven't come available.

They decided to sell first, then buy. They were hoping for a buyer who can be flexible with either allowing 60 days or allowing them to short-term rental the place back for a few months. They got offers with none of that (30 days to close) from the first few buyers, turned them down, and their RE agent is getting a little annoyed. They could sell and rent somewhere for a few months, but they aren't fond of that idea, including moving twice.

Now they are thinking, find the new place first, then sell. (they don't want to sell investments or get a mortgage at 75). I'm concerned about the stress on them for both approaches. Mom is a bit high strung, Dad internalizes her stress...they are great fun at parties!

I'm starting to think the "sell first, rent somewhere and wait" might not be good for them given their age and personalities... but then "buy, then hope we sell" also means they might lose the perfect house (and deposit, but that's cheaper than renting+storage).

Anyone with direct experience with either - getting stuck between sales is the issue that is keeping them up at night...literally.

 

[db79]

We will be potentially entering the same situation in April/May when we list our house. If the house sells before we can locate a new one we'll end up in a short term rental. More of a hassle moving twice but will not be rushing and locking into a less than ideal new home. If we need a stop gap for only a couple weeks we may bunk up at the in-laws, but that is the absolutely last resort scenario.

 

[MichaelB]

Patience is a virtue when buying a house. If one has the means, selling now and finding temporary quarters while looking is my preferred option.

 

[COcheesehead]

I’ve sold first then bought the new house twice in my life. Would do it a third time. Having the first house sold gives you plenty of flexibility. No need for bridge loans, liquidating other assets. We kept the temporary rental in a price range that actually saved us money when you consider property taxes, HOA, insurance, etc. Living in a rental also is sort of like a vacation. You feel less compelled to do house stuff. The interest we earned on our equity sitting in our brokerage account more than paid for two moves. I say sell and then buy.

 

[Amethyst]

I don't understand the issue with getting a mortgage. It is just a tool for buying. No matter your age, you can pay it off once the old house sells. Maybe they are afraid their home will be hard to sell? A real estate agent can evaluate to see what needs to be done.

As for your mom's personality, she's the only one who can deal with that. We can't help. I'm highly strung myself. I think it's like having an addiction. Only I can deal with it and squelch it.

 

[blueskyk]

We just did this last year, moving from NM to UT. We bought first in the new place (closing in 30 days) and then put our existing house on the market. We owned our house free & clear. We applied for a “bridge loan” to purchase the new house and then paid it off when the original house sold.

Prior to buying the new house, we worked hard for six months to prepare the original house for sale in hopes it would go quickly and it did (6 days on the market). So, as it turned out, we paid off the bridge loan before the first payment was due. This option was far cheaper for us than moving twice, rental & deposit, etc.

It turned out to be a big issue having two large dogs as well - when we were considering renting, we couldn’t find any place that would accept them.

So, that’s what worked for us.

 

[freedomatlast]

We are looking for our retirement house now and will sell our current house after we buy the retirement house. We are rather particular in what we are looking for in our next house and don't want to feel pressure to settle for something less than what we really want.

The last time we moved, we did the same thing. Bought the new house first, then sold the old house. With the old house empty, it was very easy to do the painting, flooring and other fixing up that it needed to sell quickly. And we were able to buy the new one for a great price since part of the deal was that the current owners could rent from us until their new house was done being built. Worked out well for all parties involved.

Since we have a stash of cash as part of our portfolio that we will live off of once we retire, we will use this money to buy the new house and replenish the stash when the old one sells.

 

[flintnational]

A moving service like PODS can help with the move. You load (or have them loaded) and they store the containers until you call to have them delivered. Your parents could consider a fully furnished place for a couple of months while they look . This gets you down to one move.

 

[Car-Guy]

I've done it both ways. I have bought first and then sold, and sold first and then bought. Depends on the situation... The "one" time I sold first, I had a deal to stay in the "sold" house for up to 90 days. I only needed 1/2 of that time and I had planned to rent an apartment if my 90 days ran out.

My next move will almost surely be buy first, then sell since money is not an issue anymore.

 

[MRG]

We got a home equity loan on our existing home and used the proceeds to buy our new home. Couple months later our old home sold.

 

[ExFlyBoy5]

A moving service like PODS can help with the move. You load (or have them loaded) and they store the containers until you call to have them delivered. Your parents could consider a fully furnished place for a couple of months while they look . This gets you down to one move.

This is a good idea considering the age of your parents. We sold our house in ATL with the intention of building our next home (1000 miles away). The timing was great in that we were able to stay at one of SIL's rental properties without a lease to worry about...just pay month to month. As fate would have it, we found an already built house that was pretty much perfect and met almost all of our needs...without the hassles of building, so we bought that one. In the end, we moved all of our stuff twice in a period of about 3 months. Even using professional movers for the first one, and professional movers to move the "big stuff" the second time...it was still a lot of work...and I am still sore a month later...and I am not even 45 years old yet!

Buying/selling is a pain in the arse...no two ways around it!

 

[imoldernu]

The question is a tough one. Dunno... At age 75, a lot of upset, no matter what or how.
We have never regretted buying into our CCRC at age 66. Obviously our last move into a house, but with an easy transition into whatever comes next.

I think what stops a lot of people from doing this... moving into a full service retirement center that includes villas.. (regular 1500+ SF houses).... is that they are not available (yet) in many areas. If we had it to do over again without our Liberty Village community, we probably would have leased a home, rather than buying, and gotten the downsize/declutter/sell part , over with early.
(Doing this at a later age would mean much more stress).

 

[Mdlerth]

Taking the time to do it smoothly

I don't know if my situation is similar enough to your parents' to be instructive, but here it is.

We bought our retirement house last year, while still owning the "old" house. The "old" house is paid off and convenient for commuting to w*rk, (haven't pulled the plug yet, OMY) so there's no hurry to sell it. We'll sell when we clock out, or vice-versa.

Every other time I've bought a house it was prompted by relocating for w*rk. A deadline for reporting to the new j*b drove all our timing, so we'd run a realtor ragged for a week until we found a property in the new area that was good enough and then write a contract on it. List the old place, apply for new mortgage, close on new house, transfer utilities, pack, move, unpack, show up at new j*b, begin new chapter in new city... an exhausting sprint.

The big advantage of buying first is that when we found the ideal place we didn't have to rush anything. With no need to synchronize both purchase and sale, we could take all the time we wanted in our search and buy the house we wanted: roomy kitchen, garage, boathouse with lift, the whole enchilada. Not having a deadline also meant we weren't under pressure to close the deal regardless of price, which gave us more flexibility in negotiating. We now can move gradually over the coming year instead of in one giant disruption. Meanwhile, we're using the retirement house as a vacation property and loving it!

Also, since we are still drawing W-2 income, it was not a problem qualifying for a mortgage to buy the "new" house. We were concerned that trying to get a loan after RE would prove difficult; one hears horror stories of retirees, despite comfortable amounts of assets, being rebuffed by lenders.

The mortgage doesn't have a prepayment penalty (it's not all that common to have one anymore, but we made certain of it before closing), so when we sell out we'll use the proceeds to expunge the mortgage and be debt-free again in RE.

This isn't the cheapest way to do it, but it was the easiest for us.

 

[Aerides]

I think I'm going to recommend they go HELOC or Bridge, and buy first. They aren't cash heavy enough to front a whole house. Not sure exactly on the mortgage issue, but I think they imagine a lot of sunk cost with it, and I know them well enough when to back off.

No worries that their current home will sell fast, they've always sold houses fast, their house is move in ready, tastefully upgraded much more than most comps, shows like a far newer home (got 2 full price offers in first 3 showings). If they had a buyer who allowed them 90 days, they'd sell.

They've already done a lot of the purging and realtor photos are done. Mom is fastidious and they probably over did it. They even commented that prepping the house for showing/listing, helped it feel less like home, and helped them feel more ready to move.

I think they might drive each other nuts if they end up in a rental month after month, not finding the right next house. They will be buying in a retirement community, so encouraging the existing owners to wait while they sell is less likely. They could stay with us for a few weeks, but no one likes the idea of that being open ended.

And yes I've used PODs and recommend them too.

 

[skipro33]

Buying a home before you sell the first is a BIG risk. My son did it last fall. When he bought, homes were selling for more than asking price with the highest bidder getting the house. He thought for sure his home, less than a mile away, would go just as quickly and just as high. It didn't. He bought before school started, then 3 weeks later when he put his on the market, the market went dead. The number of people even looking was tanked. Took him 3 months more to sell that house, meaning 3 months of double mortgage payments and in the end, dropping his price by more than $15,000. Well over $20,000 difference than what he thought he would end up with on the transaction.

Sell first, then buy, or be bankrolled and never expect to sell your house fast. It never works that way it seems, except fo the other guy.

 

[Silver]

For the last three homes I have purchased, I bought the home I wanted, repainted and had work done while it was empty, then moved into it fully, and then put the old house on the market. All the houses sold very quickly....less then one week.

For me this solved many issues and was the least stress. And I felt as if I had the most control over the process.

 

[Andre1969]

I have a friend who went through that awhile back. He put his place on the market in the fall of 2017, and started looking for new places. But, he had trouble finding anything he liked, and had one place he put a contract on, but it fell through. But then, his place sold.


Fortunately, he's a minimalist, so he was able to put most of his stuff into a small storage unit that didn't cost too much. And I let him crash with me. But, then he started rushing to get something, made a rash decision, and now is regretting it and already thinking his exit strategy. He's a single guy, in his mid-40's...I'd imagine being older, retired, and married would make it even more stressful.


I'm in the middle of doing just the opposite. I bought a house back in September of last year, but haven't sold the old one yet. The main holdup is that I need to get a garage built at the new place to house my antique cars, and I don't want to do that until my finances bounce back a bit.


But, it's also wearing on me. Even though I can afford to keep up both places, it still feels like it's wasted money. And, I hate to say it, but since there's no huge rush, I've been slow to clear out the old place. I've gotten pretty much everything of value out of it, except for the antique cars. But, there's still the concern of it getting broken into, if it looks too abandoned. And, it's a bit secluded, so I even worry sometimes that someone might drive up there in the middle of the night with a truck and start dumping there!

Anyway, sorry I don't really have any advice to give, but I thought I'd just share my stories, in case anybody can learn anything from them. No matter what you do, moving from one place to another can be a big, stressful hassle.

 

[gauss]

They decided to sell first, then buy. They were hoping for a buyer who can be flexible with either allowing 60 days or allowing them to short-term rental the place back for a few months. They got offers with none of that (30 days to close) from the first few buyers, turned them down, and their RE agent is getting a little annoyed. They could sell and rent somewhere for a few months, but they aren't fond of that idea, including moving twice.

Were they otherwise happy with the offers? If yes, then why turn them down outright?

Here in these parts, my RE agent loves to counteroffer nearly everything. Note that "closing in 30 days" is an entirely different issue then renting after the closing. Perhaps if they were trying to push out the closing as opposed to just the possession (ie after any post-sale rental), that was confusing or putting people off.

The standard RE purchase agreements around here always have a paragraph or two about renting post-closing. They are often nulled out on the first offer, but a counter offer could populate these areas (ie 60 days at x$/day). If you need a sample of typical language for this, please let me know.

-gauss

 

[ExFlyBoy5]

I have a friend who went through that awhile back. He put his place on the market in the fall of 2017, and started looking for new places. But, he had trouble finding anything he liked, and had one place he put a contract on, but it fell through. But then, his place sold.


Fortunately, he's a minimalist, so he was able to put most of his stuff into a small storage unit that didn't cost too much. And I let him crash with me. But, then he started rushing to get something, made a rash decision, and now is regretting it and already thinking his exit strategy. He's a single guy, in his mid-40's...I'd imagine being older, retired, and married would make it even more stressful.


I'm in the middle of doing just the opposite. I bought a house back in September of last year, but haven't sold the old one yet. The main holdup is that I need to get a garage built at the new place to house my antique cars, and I don't want to do that until my finances bounce back a bit.


But, it's also wearing on me. Even though I can afford to keep up both places, it still feels like it's wasted money. And, I hate to say it, but since there's no huge rush, I've been slow to clear out the old place. I've gotten pretty much everything of value out of it, except for the antique cars. But, there's still the concern of it getting broken into, if it looks too abandoned. And, it's a bit secluded, so I even worry sometimes that someone might drive up there in the middle of the night with a truck and start dumping there!

Anyway, sorry I don't really have any advice to give, but I thought I'd just share my stories, in case anybody can learn anything from them. No matter what you do, moving from one place to another can be a big, stressful hassle.

You post brings up a good point about insurance. Often, if a property is unoccupied, insurance companies are hesitant on covering much more than fire. This isn't a universal rule, of course, but something folks might consider when "carrying" two places.

 

[38Chevy454]

I think they should do the buy first, using a HELOC or bridge loan. It sounds as their house will sell pretty fast, so the small time of paying interest will result in a low cost. Benefit is the one move. It also allows them time to find the house that is what they want and not having to settle or compromise on new house they buy.


The other option is to put stuff in storage, or the PODS or similar, and just live in an extended stay furnished hotel or apt for a while. I think this option is less desirable to your parents as it will seem like moving twice.

 

[Teacher Terry]

Our last 3 moves we bought first and then sold because we have 4 dogs. It worked out fine.

 

[gwraigty]

Were they otherwise happy with the offers? If yes, then why turn them down outright?

Here in these parts, my RE agent loves to counteroffer nearly everything. Note that "closing in 30 days" is an entirely different issue then renting after the closing. Perhaps if they were trying to push out the closing as opposed to just the possession (ie after any post-sale rental), that was confusing or putting people off.

The standard RE purchase agreements around here always have a paragraph or two about renting post-closing. They are often nulled out on the first offer, but a counter offer could populate these areas (ie 60 days at x$/day). If you need a sample of typical language for this, please let me know.

-gauss

We bought our current house (new construction in 1996) before we sold our old house. We signed the paperwork for the new house in February, due to be finished in June. We put the old house up for sale right after that, also in February. One of the first questions asked by prospective buyers agents was if we intended to move into temporary housing while waiting for the new house to be built. The answer was no, that we intended to stay until the new house was finished and OK for occupation. If that put off anyone, they knew upfront not to make an offer, saving time and hassle for everyone.

As it turned out, we had no trouble selling with that condition. Either time. We accepted an offer for our asking price within a few days, from the first couple who looked at the house. Problem was, it took an entire 30 days to find out that the mortgage company that pre-qualified them turned them down twice for a mortgage due to various credit issues each of them had. (Our agent told their agent upfront that their pre-qualification letter meant nothing. Turns out he was right.)

So, we put it back on the market for the second time in late March. We got an offer from another couple for a little less than asking price in late April. In late May, ownership transferred to them. We paid rent according to the daily rate set in the contract, for about a month. It all worked out, but we had only one day to move because of it. I remember we did a walk through of our new house on Wednesday, and we had until that Friday to be out of our old house. That's how close it was.

Next time, we plan to buy first, move first, then put this house up for sale. A rushed move is no fun at any age. We were in our early 30s then. I can't imagine how difficult that would be at the OP's parents' age.

 

[Aerides]

Were they otherwise happy with the offers? If yes, then why turn them down outright?

In both cases they had tried to negotiate via their agent to counter. But for various reasons, no wiggle from the buyers. Just unfortunate they have a couple of difficult first bids, but it's giving them doubts.

Personally I think their agent should have known these were not the right buyers before showings, but eh. I'm mainly worried about the open window after they sell, before they find the new place, and the toll it might take on them. I know they'll worry too if they buy and then don't sell, but I think that's less worry for them, and yes their age is a factor.

 

[Scuba]

If they’re going the HELOC route, they may have to wait a while. I don’t think banks will do a HELOC for a home that has been on the market recently. Perhaps a bridge loan is a better solution.

For me, I would be much less stressed selling first and taking my time buying while renting a month-to-month furnished place. YMMV

 

[Spock]

I've been able to buy/rent first and then sell for the last 30 years.
Every time I sold, I was either moving into a rental or had converted the house I sold into a rental. Every time I bought I was coming out of a rental.
So I've had the luxury of always having a 30 day overlap to move into the new property.
I've seen too many people who sold on Friday but didn't get the keys to the new place until Monday so all of their worldly possessions are in the back of a moving truck... only to have something kink up the deal.


It would be a very rare buyer that is going to let the seller stay in the property after a sale. Moves are disruptive and they want to get it over with. If I were such a buyer the rent I would charge the seller would be "highly motivating".



It depends entirely on your parents finances and their local housing market as to if they can afford to overlap. Also consider the stress/disruption of always keeping the house "show room ready" and having to leave at a moments notice for a showing.