Moving Your Home—Timing is Tricky

Selling your home usually means your goal, at least short-term, is to be homeless.

That’s an important fact to consider. A few years ago, it was much easier for the move-up buyer—it was possible to obtain a “bridge loan” that would bridge the gap between buying a new house and selling the old. With new lender restrictions, such a thing no longer exists.

Sellers have a few options, one of which is hoping that all the stars line up nicely. Buyers of mine that sold their home in San Jose with a 60 day close just moved to Alamo in perfect constellation circumstances.

They wanted to buy a home in Alamo for under a million. You can imagine that there wasn’t much to choose from in this price range, but we were lucky that the first house I showed them was a great match. We took our time, and checked everything else out, but by the time their buyers were ready to remove all contingencies in San Jose, they were ready to make an offer.

When one house closes and the funds are moving to the next house, it’s still not perfect timing to move from one house to the next. Your house closes escrow, you get the funds. But it’s not your house anymore. You can move funds directly from one escrow to the next, but you will still have at least a day of limbo. You can often ask for a rent-back, and pay a few days rent in your old house to bridge the gap.

A more unusual situation, occurring in this case, is that my clients were able to rent their new house (which was vacant) for a week, prior to owning it.

These buyers were both lucky, that they found something they liked right away, and smart, to have given themselves a long escrow period to look.

Many people want to identify their new home before they think about selling the one they are in now. That’s the perfect world. In many cases, you really can’t be sure you want to move until you know where you are moving.

That’s where the bridge loan of yesterday’s lending environment would have been helpful. Now you can sometimes put in a contingent offer on a home—but many sellers (if they have choices) will not consider a contingent offer. They have been trying to sell their home—they have no confidence that you can sell yours.

But in fact, a contingent offer can be a good thing for a seller. As opposed to the “all cash” offer, this should not be a low-ball. My advice to sellers looking at a contingent offer is always dependent upon what the house is that the offer is contingent upon. If the buyers have a house to sell on a busy corner and they have unrealistic expectations about price, that’s a different story than the house in the go-to location where all the homes get multiple offers.

Currently there are four homes in Danville and two more in Alamo that have accepted a contingent offer.

Moving from one home to another is tricky. You can hope the stars align, but prepare a backup plan (renting for the interim). Or, if stockpiling cash is an option, that will make you a very strong buyer in any market!