In the current market, selling your house will likely be easier than buying a new one. Because of this, I often talk with clients that want to sell their current home, but are worried that it will take months to find their next home, and they will be homeless in the interim. As a seller, you are in a strong position to negotiate provisions that can alleviate some of that stress, and often solve the problem of the interim period. I have found that if the listing states exactly what you need, in most instances you will get it. Here are my top five strategies for Moving Up in this market:
Free Rent Back: You can ask the Buyer to allow you to stay in your home past the closing date. Due to the competitive nature of the market, most Buyers are offering this at no cost to the Seller. In the last couple months I have had Sellers receive free rent backs on almost every single sale, and for as much as 2 months. So you could get an offer on May 1st, close on June 1st, and then stay in the home for free until August 1st. That gives you 90 days to find your next home!
Longer closing dates: You can also build in some extra time in the closing date. Buyers are trying to make them short to entice the Seller, but most Buyers would be just as happy with a 60 day closing as they would a standard 30 day, giving you an extra month to close on your next home.
Take a gamble: In the current market, it is highly likely your home will sell in the first 2 weeks. You could start house hunting prior to listing your home, and once you are in contract, scramble to put your current house on the market knowing it will sell quickly. This is not ideal, but it may be a better situation for those who are not willing to take on the risk of having a time period without somewhere to go.
VRBO: I have also had clients that move all of their belongings into a POD and then rent a condo or home through VRBO for a month or so while they house hunt and close on their new home. Built-in vacation!
Plan B: Having a back-up plan is necessary. We hope that we do not have to utilize it, but you don’t want to be figuring out your Plan B at the last minute. Staying with a relative, renting for a year, and a combo of the above options are all good back-up plans. Make sure if your Plan B is to stay with a relative that they are aware of this prior to you showing up on their doorstep with all your belongings. Usually if you have a well thought-out Plan B, fate has it that you wont have to use it.
A MOVE UP Success Story
Clients of mine purchased their Seattle home in 2010, and although it was not the market of today, we still had to make a full price offer on the day it hit the market. Six years later they were able to sell their home for almost 70% more than what they paid for it. We received 3 offers in the first 5 days & negotiated a free rent back for them. As soon as we were under contract we ran around the city looking at listings. Within a week we found two they were interested in moving forward on. We inspected both of them, including a sewer scope, and found one to have issues. We made an offer on the other one, got it for under the listed price (HUGE win in this market), and they are closing both their purchase and their sale on the same day. Their new home is over double the square footage of their former, and has everything they were looking for. Whew!
I secured this adorable rambler for my clients just hours after it was listed for sale in SeaTac. My clients trusted me in my unorthodox tactic & it worked! In this market, in order to stand out you may need to get creative and make bold moves with your offer.
Charming craftsman near Westwood Village in West Seattle received multiple offers that pushed the price well over the asking price. In a HOT housing market, a common tactic to make an offer aggressive is to include a price escalator addendum with your offer.
Home Security Tip – We just installed this awesome doorbell at our house (thanks to a tip from a client/friend). I would HIGHLY recommend it. You can answer it and speak to the person on your porch from anywhere (work, vacation, etc.). It records a video when there is motion and sends you a text to your phone. It was so easy to install, only took about 15 minutes. I know this sounds like a commercial, but it’s just because I think it is so cool! You can get them from Best Buy, Amazon, etc.
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building a home from the ground up is the ultimate adventure
Last month, I mentioned that Shawn and I are in the process of building a home. We affectionately are calling it the BLACKBERRY HOUSE, named after the brambles that were growing inside the current structure the first time we walked in. We purchased it at an auction 2 1/2 year ago, without being able to go inside first. (Ask me to tell you about the refrigerator next time I see you….)
I have had lots of questions from clients regarding the process of building a house. So I’ll provide brief updates each month on the progress so that readers can get an idea of the steps, as well as the ups & downs.
In June, we will demolish that home and break ground on the new house that will be completed next March. Before we could get permits to tear down, we had to verify that there was no asbestos in the current house. Shawn suited up and excavated several areas for the required samples (walls, ceilings, flooring, etc.). He diligently packed and labeled each of the samples and carefully placed them into a plastic toolbox for safe transport.
My assistant delivered the samples to a lab in Auburn and the woman at the testing office took the Ziplock bags out of the toolbox and casually tossed the samples on the desk. So much for trying to prevent cross-contamination! Good news, the samples were all clear! On to permitting!
Windermere Gardner Report
Washington State has seen very robust growth over the past 12 months with the addition of 102,600 new jobs, which is 224,000 more jobs than seen at the previous peak in 2008. With this robust growth, it is unsurprising to see the unemployment rate trend down to 5.8%—well below the long-term average of 6.4%. As pleasing as it is to see the unemployment rate drop, it is equally pleasing to see that the decrease comes in concert with growth in the civilian labor force, which continues to grow at a very solid pace. I continue to believe that there is no risk that we will see a statewide decline in the employment picture in 2016.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics.