Dear Real Estate Adviser,
I’m looking to relocate from New Jersey to Kentucky. What should my timeline be from selling my current home to making an offer on a Kentucky residence? Is it possible to make my purchase contingent on my sale? I would need to get my down payment out of my Jersey property.
— Joe U.
Search for low mortgage rates at Bankrate.com.
You’ve basically answered your own question given your apparent need to make a contingency offer. Yes, such “sale and settlement” contingencies are very common. However, they aren’t especially popular with sellers because they keep them from accepting competing offers for a set period, so you may be asked to pay a little more on your replacement home, pay more earnest money, or both.
The safe option
The safest best in your scenario is usually to secure the sale of your present house first, then rent an apartment or extended stay hotel room if need be as you seek your next one. It’s safer because sellers who think they’ve timed the purchase of their next home with a “sure-thing” offer on their own place have often lived to regret it when their sale fell apart due to cold feet, an inspection issue, mortgage snafu or some other snag. That breaks the sell-buy chain and leaves you with the heartbreak of not being able to buy that home that you’ve settled on, and possibly minus some earnest money, depending on your buying contract.
Hassles of moving
Certainly, moving twice isn’t easy and there are associated costs and hassles with it, including storage of your belongings. And if the market where you’re moving strengthens while you rent, you’ll pay more and have fewer choices. But if it weakens, you’ll pay less and have more choice. So that’s a gamble, too. Renting short term, by the way, may cost slightly more and you won’t have the benefit of mortgage tax deductions, but you’ll have few maintenance obligations, no property tax, no homeowners insurance and no surprise bills for plumbing or appliance problems.
Selling in a rising market
The sell-buy timing just might be perfect in this instance. While the major New Jersey markets have enjoyed sale-price hikes for the past 15 months, all of the major Kentucky markets have started experiencing flatness following several years of price increases. My sense is you won’t lose anything from waiting to buy, and may actually gain. However, as baseball Hall-of-Famer Casey Stengel used to say, “Never make predictions, especially about the future.”
Your strategy will probably be optimally conceived with the aid of a seller’s agent in Jersey and a buyer’s agent in Kentucky. Timing-wise, spring still features the most buyers, but winter often features fewer sellers, less competition, and potentially more motivated buyers. Feel free to put your home on the market at a date you’re most comfortable with, ideally in the very near future, especially since the Jersey market is rolling at present.
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