Buying and selling a Boston condo at the same time
There are different studies showing that an average homeowner stays in a home between 7 and 13 years. Whatever the case is, for most people different homes in different locations are needed at different stages of their lives. Majority of people seem to switch homes between twice and four times in their lives. The very first home you bought in your 30’s may not be big enough after your children grow up and you may feel the need to upsize your home at some point with a bigger house that has a backyard. This type of upgrade also comes with moving to a different location for the home, which is usually away from the city center. After children move out, that’s another point in life where you may need a different home. Some people move back into the city in a condo, or others simply get a smaller house reducing space their monthly payments. As you get even older, you may need a one-story house without stairs as your mobility becomes an issue. Our need for a different home is perfectly synonymous with our lives.
Having said that, if you currently own a Boston Beacon Hill condo and you want to sell your current home and buy a new downtown Boston high rise condominium, what is your best strategy for the transition? Sell first and buy? Or buy first and sell? There is really no answer to a point where I can generalize which is usually better for anyone. It really depends on these questions below.
How competitive is the type of the home you plan on purchasing?
Regardless of whether it’s a seller’s market or a buyer’s market, homes in the median price range or below have more buyer competition. In the downtown Boston area the median home value from most places ranges from $1,000,000 to $2,000,000 in today’s market. Of course, there are areas where the median home value is less than a half million dollars. Obviously, different Boston condos for sale have different price ranges and demand. There are condos and townhomes that are well below the median of detached single family homes. So how quickly do homes get sold for the type of home you want to buy in the area? If the Beacon Hill condos sell out like hotcakes, you need a different strategy versus buying a type of home that sits on the market for longer in the area. Sellers prefer offers without a primary residence sale contingency. If you are wanting to put an offer with that contingency for a type of home that sells within the first 10 days of listing because of high demand, you won’t get that home unless you offer a higher sales price to compensate for the risk of your not selling your home on time. The listing agent will also want to see how quickly your home will likely to sell so that the seller understands the risk and evaluate it against the benefit of accepting your contingent offer. In this case, the easiest way would be buying first before you sell if you can be approved for a second mortgage free of your primary home sale contingency. If you can’t get such a mortgage pre-approved, then your strategy should be to minimize the risk of your contingent offer to the seller by waiting until you accepted an offer on your primary home or until the inspection negotiation is complete. Often after an inspection negotiation is complete, the risk of the transaction falling through is a lot less likely. It could still happen by the way. If that doesn’t work, you may need to wait until after closing to buy a home. If you can purchase the second home out right with cash from closing, the transition can be smooth. You will only need 10-15 days until you put an offer and close with cash after inspection. Of course, as your real estate agent, I would have negotiated for your rent back for up to 15 days after closing on your first home so you don’t need to move elsewhere in the mean time. The worst scenario would be having to find a rental home after closing on your home and to hunt for your second home but it may still be necessary if you are looking for a rare home.
How many similar inventories are there for the type of home you want to buy?
The number of inventories will also dictate your strategy when selling and buying a Boston condo for sale. More the number of inventories, easier your home selling and buying transition will be. If you are looking for a very rare home to purchase, which only comes on the market once every other month, timing your selling and buying will be very difficult. Of course, the inventory that pops up may be in high demand or low demand and that will play a factor in ways explained in the first bullet point. Often it becomes necessary to get a rental home in this scenario but if you have lots of pets, or have a large boat, things will be difficult for you to even find a rental home that allows your current life capacity on a month-to-month lease. You will need to ask for your family’s help or come up with a creative solution.
How quickly will your current Boston condo sell?
Depending on how quickly your current Boston condo will sell, you can move forward more quickly with your offer to buy a home. Also, if it is apparent to everyone including other real estate agents that your home will sell quickly, then you may even have the power to get your offer accepted on a second home as soon as you list it on the market. Pricing your current home competitively to sell quickly will help. If that’s the case, you will have a better chance of negotiating a rent back at your current place. It’s all about utilizing your leverage in two different transactions to coordinate for your best possible move. It’s not easy and that’s why I provide a thorough consultation with clients wanting to sell and buy.
Downsizing or upsizing?
Downsizing or upsizing may provide different levels of demand for your target home to purchase. It will depends on the location, price range, and home types. The bottom line is whether you are downsizing or upsizing, figure out the level of demand and competition for your target home to purchase.
Cash or mortgage for buying?
Cash is king as always but for the majority of people, taking out a mortgage is a necessity for your next home. As discussed above, depending on whether your mortgage pre-approval is contingent upon closing on your first home or not, it will affect your strategy. You also need to work with a good loan officer who can provide lots of customer service so you know all your options upfront.