Should I Sell First & Then Buy, Or Vice-Versa?
By Shayne Bowen
The decision you need to make is this: Decide whether you want to sell your home
first and then buy a new one, or vice versa.
This decision is quite important. Far too many times I've seen clients make
unfortunate decisions and waste significant sums of money due to making an ill-advised
decision on this question.
There are pros and cons regarding which to do first.
However, it's unequivocally true that the clients who are most experienced in
real estate virtually always sell their current home first, and then buy a new one.
The most experienced buyers sell their current homes before buying a
new one. But they do so with a "release
clause" that allows them to CANCEL the escrow on their current home if they are not
successful at locating a suitable new home.
By doing it this way, they are able to get the best of both worlds:
- They often save $5,000 to $10,000 (or more) on the purchase of the new home. The
reason: the seller of the new home takes them seriously, because they are ready and able
to perform. They already have their current property "sold."
- They have a complete selection of new homes. By doing it this way,
the experienced buyer can choose from virtually all the homes currently
Conversely, if their current home is not already in escrow, 30%-50% of
home sellers either won't consider an offer from them, or would do so only with less
favorable terms and a higher purchase price than would otherwise be the case.
- They have complete protection from "being out on the street" without a
We write into the sales contract on your current property the following
"This transaction is contingent upon the seller closing escrow on a
suitable replacement home."
Bottom line: If you don't find a suitable replacement home, even though
your current home is already in escrow, we can legally cancel the sale on your
current property. This means you won't be out on the street without a
home - even if you don't find a suitable replacement property after your current
property goes into escrow.
- They know the financial numbers that are involved, because they already
have their current property in escrow.
Knowing what I know (after over
two decades in the real estate business) if I were making a move I would personally do
this the same way as described above: sell my current property first - with a release
clause in case I couldn't locate a suitable replacement property.
Clients who don't follow this process all too often experience
some significant negative consequences:
- They experience a significant emotional let down when the seller of the home that
they are buying cancels the sale via a "release clause." Sellers virtually
always have a provision in their sales agreement (a "release clause)" that
states that they may cancel the agreement if they find a "cash" buyer - one that
can perform without selling another property.
- They are unsure of the financial numbers involved, because they
don't know how much they are going to get out of their current property.
- They often waste up to $1,000 on a termite report, contractor's report,
appraisal, and other reports, only to find out that they didn't get the property because
the seller finds a "cash" buyer, thereby cancelling the sale.
- They all too often sell their current property for less than they could have
gotten for it, because they are in a rush to avoid losing their "new" home to a
I've applied the steps above in my own real estate purchases. They work, and
they are the smart way to go.
|If you would like a
complimentary, personalized property value analysis, please phone Shayne Bowen at 707
577-8200! (Alternately, you may click here
to make a request for a personalized property value analysis.)
|If you are interested in making
a purchase or exchange of a property, please phone Shayne Bowen at 707 577-8200!
(Alternately, you may click here
to request information on potential properties for you.)