What Do You Do When You Can’t Find a New Home?
Being in-between homes is more common than you think — and I have a plan if it happens to you.
At first, it sounds like a problem any seller would love: Your home sold after only days on the market. After all, the fear of a property lingering on the market, enduring possible price cuts or low ball offers is what keeps many from selling in the first place. While a quick sale is a reason to celebrate, the challenge comes when it happens before you are able to find a new home.
This is an increasingly common situation in our current market, which still remains hot due to the continued limited inventory that started in April 2020. Though inventory may increase in the spring selling season, there’s a conundrum. For every home listed, another home has to be bought. Until inventory outpaces demand, it’s likely that securing your next home might take a little longer than anticipated.
Still, the upsides of a very quick home sale still outweigh the inconvenience of possibly being in-between homes: Less drama, achieving your asking price (or more), and being able to consider multiple offers to find the best buyer for your house. That's where I fit in...I can help you plan ahead by following these strategies before you list.
Ask about a contingency clause.
A home sale contingency is a clause you can add to the sale of your home, or alternatively setting a long closing time in the sale of your home that essentially states you won’t finalize and close the sale of your home until you find a new home. Ordinarily, buyers find such clauses to be off-putting because it creates a lot of uncertainty in their own timelines. However, when demand is very strong like it is now, there may be a buyer out there who has a more flexible timeline for their move. (For instance, a family who is in the market for a home, but doesn’t want to move until the new school year starts). I'll discuss it together to see if a clause would make sense for you.
Consider a bridge loan.
One of the reasons sellers panic about being in-between homes is dipping into their savings to cover the unanticipated living expenses, especially as the sale is pending on their current place. A bridge loan is a short-term loan that can cover you in this instance. (It can also add to your home purchasing power, in case that opens up more options to consider buying.) The downside is that these loans often have higher interest rates and quicker repayment periods. Do the math and read the fine print to see if this makes sense for your situation. Need some advice? Let's connect.
Look for rental or corporate housing.
Whether you’re located by the beach, the city, the mountains, or a quaint small town that’s popular with tourists, there are seasonal rentals to be found. While the seasonal vacation rental market is projected to pick up as travel rebounds following all that 2020 brought, these rentals weren’t going as quickly as annual rentals. In other words, there are more options to be found, often at prices lower than they’d traditionally go for. Look out for deals for off-peak rentals especially. Another option is corporate housing since they typically offer more flexibility as you settle into your new area. Both vacation rentals and corporate housing tend to be furnished so if your furniture is in storage until you're able to buy your new home you'll be comfortable the whole time.
Add rentals to your home search.
Yes, you should look at the properties in your desired area to get a sense of their availability and price just in case. I have great insight about our Toronto market and connections to agents to specialize in rentals — and not just homes for sale. Additionally, some of my clients may be on the fence about listing their home and would consider a rental arrangement, be it former buyers who purchased multi-family homes or are former buyers who purchased vacation homes that are rented out in the off-season. Which brings us to…
Alternatively, you might want to consider listing your home for sale with the condition of a Seller Lease Take Back clause which allows you to sell your home today and remain in your home for a specified time period while you take the time to carefully search and purchase your next permanent home.
Hire an agent with connections.
When it comes to securing a new home in a limited inventory market sometimes it comes down to having an agent who knows how to leverage their connections. As your real estate agent, I'm prepared to tap into my database of potential sellers and my membership in an exclusive realtor network (homes available for sale and NOt listed on MLS) in the areas that you're considering buying. From there I'll have conversations with each interested seller and set appointments to preview their home for you. If I can help find potential homes to showcase to you so that I'm not only helping you sell your home but ensure that you can buy a home as well, I will.
When you’re putting your home up for sale, it’s easy to let anxiety take the wheel. The fear of selling your home before lining up your next home is one of those worries that commonly come up when the market is hot. However, it’s also one with a few easy solutions — and depending on your unique situation we may have even more creative ideas depending on your market. You never know if such a scenario may be a blessing in disguise, too. Just think, next year at this time, you may be sitting pretty in an affordable rental in a fun destination, taking your time to find your dream home.