For the next edition of our blog series on new challenges home buyers are facing in 2021, we’re tackling the topic of “sale of home” contingencies.
There’s no question that in the current seller’s market, buyers need to do everything they can to make their offers appealing to sellers. Buyers are turning to their REALTORS® for advice on how they can be the most competitive and what steps they can take to make their offer stand out from a stack of competing offers. Removing a “sale of home” contingency from one’s offer is one way to do so, reducing the level of risk the sellers will be taking on. However, keep in mind that removing this contingency requires approval from a lender, and most lenders are experiencing delays due to the high amount of demand. With that in mind, if your buyers want to be approved to make offers prior to selling their current home, you’ll want to get the paperwork going as soon as possible.
Let’s look at the issue of “sale of home” contingencies from another angle. Sure, removing them adds appeal to an offer, but… Is it a wise thing to do? Virginia REALTORS® General Counsel Laura Farley says, “In the current market, while it’s likely a buyer would be able to sell their current home reasonably quickly, it’s certainly not guaranteed. Some properties are challenging to sell, whether due to the condition of the property, a less-than desirable location, or an unappealing lot.”
If buyers don’t want to risk having to pay two mortgage payments, one option you can recommend is that they sell their current home and become short-term renters, living in a rented property until they are able to purchase a new home. While moving one’s household twice instead of just once is certainly an inconvenience, to some, it may be less of a burden than bearing the weight of two mortgage payments simultaneously.
In a competitive market, thinking outside the box and taking on small inconveniences might help your clients in acquiring the home of their dreams.
Check out ALL of our stories in the “New Challenges for Buyers” series here: