Everyone needs an upgrade sooner or later, so let’s talk about how to buy your next home while selling your current one at the same time.
Often, sellers resign themselves to living in a rental between their sale and purchase. This means an extra move, extra rent payments, and often paying more for a home once they finally do purchase than they otherwise would’ve. Together, we can make a plan to seamlessly transition from one home to the next, protect our peace of mind when selling, and maximize our advantage when buying.
This guide from NerdWalletoutlines some common paths for buyers and sellers navigating this same process nationally—but the NYC market has some unique rules of its own.
List First, Then Buy Strategically
There are several items we can tackle ahead of time to make sure our transition runs smoothly. First, we’ll familiarize ourselves with the real-time data on the sub-market we’re selling out of versus the one we’re buying into. If you’re selling a one bed and purchasing a three-bed, or selling in Manhattan and purchasing in the suburbs, average days-on-market, average negotiability, and year-over-year price metrics will vary greatly between those markets. We should be familiar with these figures.
Second—and this can be counter-intuitive—we’ll want to list your home for sale before making offers on homes you wish to buy. We’ll have a fair amount of leverage as a seller on timeline, and far less as a buyer. We’ll also be much more competitive as a purchaser once the sale of your current home is in contract. Here’s how we make competitive opening offers once you’re positioned to move quickly.
Why Contingencies Don’t Work (But Bump Clauses Might)
Another important reason to list your current home first: the sellers we’ll be looking to transact with on our purchase are unlikely to grant us sales contingencies. There are just too many variables in the co-op sale process, and the timeline is too long, for any seller to be comfortable with that scenario. Forbes gives a helpful overview of how sales contingencies work in theory—but in New York, they’re rarely accepted in practice.
If we absolutely must sell our current home before buying the next one, a contractual term we can offer sellers allowing us to compete with other buyers who don’t have a home to sell is what’s called a ‘bump clause.’ If they agree to go into contract with us, our seller may continue to market their home until the sale of our current home goes into contract. If they find a more attractive buyer, we’re granted a right-of-first refusal. If we’re not yet in the position to purchase, we take our deposit back and move on. This way, there is no added risk for them in dealing with us, and we’re not in danger of losing our deposit if our sale takes longer than expected.
Helping homeowners manage two real estate transactions at once is a cornerstone of my business. If you have more questions about how to conduct this process seamlessly, let’s talk more. This is Jacob Wood, your New York City real estate advisor.
