Ask A Realtor: Can you find success trying to sell to buy?
Are you putting your home on the market subject to finding a new property?
Dear Mark and Tiffany,
I am an Eagle County homeowner and interested in putting my home on the market but wondering where I can buy. I will need financing and anticipate a loan approval will be contingent on the sale of my home. This leaves me wondering if I should just wait it out and see where the market goes or if there are some options I have to sell and buy and still stay in the Vail Valley region.
Sell to Buy
Dear Sell to Buy,
Your question is one of the most common ones we are receiving right now and applies to other resort or high demand markets that are experiencing similar inventory challenges. While there is limited inventory, new listings come on the market every day, which means you still have options for finding a new home. You just need to be ready when that time comes.
Our team is having great success working with people such as yourself, who are putting their home on the market subject to finding a new property. We have recently worked with two sellers, both of whom were able to list their home and find buyers willing to negotiate flexible move-out terms, providing them with some extra time to find a new home.
These scenarios include a seller in Beaver Creek who went under contract with a buyer who does not need to get into the condo until next winter. We were able to negotiate a lease-back agreement, giving the seller close to eight months to find a new place to live. The added benefit here is because the seller now has a contract, he is able to proceed with financing approval, allowing him to move on a new home offer quickly.
Another seller in Homestead was faced with a similar dilemma and we were able to structure a win-win contract for both parties by including a built-in extension clause on closing based on the seller’s ability to find a new home. Given that the typical closing, unless it’s a cash deal, takes 45-90 days, this gives the seller a built-in two to three months to look for a new home, which per the contract can be re-negotiated every 30 days as needed until the seller finds a home. While there are limits on how long the buyer may extend the closing and move-out date, it is one of the benefits of being in a high buyer demand situation. There is the added advantage of being in a primary resort area, where many buyers, particularly in Vail/Beaver Creek and Cordillera, have more flexibility on terms because it’s often not their primary residence.
While not every buyer is going to be willing or able to negotiate flexible terms, they do exist. For people, such as yourself, who need the equity from their home to buy a new one, it is prudent to look at other underwriting options to gain lender approval. These include bridge loans and/or leveraging retirement funds to close on a new property. This is where working with an experienced realtor can be a real asset as they bring the depth and scope of experience in contract negotiations as well as relationships in the broker community to find available properties to buy even before they come to market.
There are plenty of properties coming to market and we have yet to leave anyone without a replacement property. It’s more about the properties moving so quickly given the buyer demand.
Again, this is where your relationship with a knowledgeable and experienced broker can work to your advantage.
Banks will also typically pre-qualify financing for a home that is under contract. A home under contract gives the lender assurance that the unknowns, such as inspection and appraisal, have been addressed. In turn, you are in a position to now move forward with finding your next home and being able to make a timely offer.
This is a great time of year to list your home as the “selling season” gets underway, providing you with some added months to find a buyer and new home before the next ski season. This is also a time of year when many buyers have more flexibility to negotiate terms.
Good luck with your sale and search,
Mark & Tiffany
Mark and Tiffany Weinreich are 13-year Berkshire Hathaway HomeServices Colorado Properties broker associates with a combined 30 years’ experience selling Vail Valley real estate. The Weinreich Team specializes in luxury, resort-market residential real estate. Vail Valley residents for more than 28 years, the Weinreichs’ knowledge and expertise spans all of Eagle County, from East Vail to Gypsum. They are among the top performing broker teams in the Vail Valley, including earning the 2020 Chairman’s Circle Diamond Award for broker teams. Mark is also a 10-time Berkshire Hathaway HomeServices Colorado Properties Chairman Award and Legend Award winner, representing the top one percent of all Berkshire Hathaway HomeServices brokers nationwide. For more information, visit www.beavercreekmtnrealestate.com, email Mark@VailMtnRealEstate.com or call 970-376-3204.