Have you ever gone to an open house? Or called a real estate agent about a listing you see? Maybe e-mail an agent about a property he/she has listed? You just want to check out a house. Maybe you’re just curious. Or, maybe you’re even pretty serious about buying a house. Doesn’t matter. All you’re doing is wondering about a house. That’s it. That’s what you want to talk to the agent about…the house you came to see, or called about. And it seems like one of the first questions an agent asks you is, “Do you have a house to sell?” It’s a seemingly odd question, right? It doesn’t make sense for them to ask that question…at least not at that moment. It seems a bit “cart-before-the-horse”, doesn’t it? It might even come across as kind of pushy and forward, and beside the point. Whether you have a house to sell or not seems irrelevant at that point. You don’t even know if you like the house, or will buy the house you are looking at. And you aren’t even thinking about selling your house, until and unless you find the house you want and actually have an offer accepted.
So, why do agents bring this up all the time?
You probably figure it’s because they’re hoping you do have a house to sell, so they can list the home you own, sell you this one you are asking about, and get two sales off of you. Or that they want you to list your home, and get it under contract, so that you have to move…(again, so they can get two sales off of you). Which makes you feel like they’re just looking to make as much money as possible, as quickly as possible, off of you. And, all of your fears and perceptions about real estate agents seem justified…
Whether you have a home to sell or not matters.
It might seem kind of early on for the agent to ask you this. But it’s not. In fact, this question should be asked, answered, and addressed, before you even look at a house to buy. Agents need to know this. You need to know this. And it has nothing to do with an agent wanting to make more money, or any money at all, off of you. Because, if you own a home, the chances are…you need to sell your house before you can buy another one. That doesn’t apply to everyone, of course. But most people can’t buy another home, until and unless the house they currently own is sold… …which doesn’t sound all that appealing to most people. It begs so many questions. Here’s a few of them…
- Who wants to sell their home without having lined up the one they are buying first?
- What if you can’t find a house you want to buy once your home is sold?!
- Won’t that put you in a tough spot to negotiate the best price of a home you want to buy, since you will be under the pressure of time? Will you have to overpay just to make sure you have a house to move to?
Those are just a few of the most common, and valid concerns.
Maybe You Don’t Need To Sell Your Home First…
Almost everyone an agent meets wants to be able to buy a house, without having to sell the house they already own first. So, agents are always asked if there are alternatives. Basically, there’s one that solves this problem every single time. Do you have enough cash to just buy a house outright!? If so, you are in luck! Go ahead and look for a house, and buy one. Move out of your house and into the new one. Then sell the old one at your leisure. You have options most people do not. There are some other options, of course. But they aren’t definitely options for everyone. For instance:
- A bank might loan you money to buy your next house without selling your other one first. There are certainly circumstance and products that will allow for this. But this depends heavily on you and your financial picture.
- You might be able to negotiate a “home sale contingency”…meaning, the owner of the house you want to buy agrees to give you time to sell your home, and your purchase is actually contingent upon getting your house sold. (Tough thing to negotiate in a lot of markets, or with many sellers. It isn’t all that appealing to sellers. Put yourself in their shoes for a minute… Would you agree to that as a seller?)
While you might be able to find an alternate route, other than selling your house first, it’s unlikely. And in many cases, it makes you a less than desirable buyer…which limits your options, and ability to negotiate a good deal. So many people lose out on the house of their dreams, because they search and find it before they are in position to do anything about it. It’s a recipe for wasted time, aggravation, disappointment, and heartache.
So, what should you do?
First, you should assess what your options are as early on as possible. Speak to a real estate agent and a mortgage lender. If you discover that you have options beyond having to sell your place first, awesome! But if not, don’t feel like you are the only person on earth to ever be put in this position. You have a lot of company. That doesn’t make it any easier to deal with, of course. What will make it easier for you, and set you apart from everyone else in the same position, is understanding how critical it is to sell your home first. And, having a solid plan and approach to time the sale of your home, and the purchase of the next. (Which a great real estate agent can help you come up with.)