In a recent conversation with a new buyer who would also be selling her house, the question came up as to when she should put her house on the market. Does she list it now and hope that she's found a new place by the time she gets an offer on hers, or does she wait to list it until she has an accepted offer on a new place? The table below outlines why listing your house before you have an accepted offer on another home gives you more negotiating power on both the selling and buying end.
WAIT TO LIST HOME UNTIL YOU HAVE ACCEPTED OFFER ON A NEW HOUSE
LIST HOME BEFORE YOU HAVE AN ACCEPTED OFFER ON A NEW HOUSE
|Sale of home contingency with bump clause -- Most buyers are not able or don't wish to purchase a new home while they still own their current home. Therefore they will have to include a sale of home & contingency on new home, as well as bump clause. The bump clause allows the seller to accept secondary offers and potentially “bump” you out of the primary position.||No sale of home contingency or bump clause --When you have an accepted offer on your current home, there's no need for a sale of home contingency or bump clause, so the seller won't be able to "bump" your offer for a secondary.|
|More pressure to offer higher price on new home to make your offer more attractive to the seller. A higher purchase price demonstrates to the seller that you are committed to getting your house sold and that it's therefore "worth the wait" for them.||Gives you more negotiating power on purchase price of your new home. When you have an accepted offer on your home, you've already demonstrated to the seller that you are committed to selling your house.|
|Less negotiating power on current home. When you write an offer with a home sale contingency and bump clause on a new house, you'll want to get it removed as soon as you can to avoid being "bumped" by a secondary offer. Quite often this can mean accepting a lower price on your house to secure an offer.||More negotiating power on current home. You’ll be in a better position to negotiate a higher price on your current home since you won't be under the same pressure to remove a home- sale contingency.|
There are, of course, variables to this. You could very well find the home of your dreams before you have an accepted offer on your current home, but if the seller sees that you've taken that step and gotten it on the market, it shows a level of commitment you otherwise wouldn't have, which puts you in a stronger negotiating position.
Talk to your Realtor® about your specific plans, including timeline for moving, to help determine the best strategy for you to achieve your goals both on the selling and buying ends.