These strategies will help sellers transition between homes.
How are our sellers transitioning in this housing market?
First, let me put things into perspective. The reason we’re talking about this is that inventory is historically low. There are actually more buyers in our market than we have homes for sale. When a great property pops up and it’s priced to sell, we’re seeing a swarm of buyers attack it and do whatever it takes to get it. This is creating challenges for sellers because those who have to sell then buy are having trouble finding a replacement property. Many of them don’t want to put their homes on the market because they won’t have anywhere to go after they sell. This is the bottleneck effect we’ve been dealing with for the past three or four months. Thus, we’ve come up with specific ways to help our sellers transition:
1. The rent-back. In the past, for sellers transitioning, we’d asked for a moving timeline of a month or two. Nowadays, sellers are asking for whatever they need. Sometimes it’s a month or two, sometimes it’s three to six months, sometimes it’s up to a year. Regardless of what strategy you use, there will always be pros and cons.
A shorter rent-back will be open to more buyers, while a longer rent-back will limit the number of people who can actually accommodate that rent-back. Sometimes with a rent-back, you pay the buyer the cost of owning the property. Other times, it’s a discounted rate. With how aggressive the market is, we’re seeing a lot of buyers let sellers have a free rent-back for however long they need in order to sweeten the deal.
2. Contingent sale. As a seller, you can list your property, field offers, and accept an offer contingent upon finding another place. Basically, you negotiate a certain amount of time with the buyer to find another place so both escrows can be done at the same time. If you can’t find a place, though, the deal is off and you’re not selling. That creates certainty for our seller, but not so much for the buyer. Again, there are pros and cons.
3. The staycation. Let’s say you sell your property and negotiate a rent-back timeline to ease into your transition. Then, you can hire a pod company to take all your stuff, move it to their storage facility, and then rent an Airbnb for three to six months. There are a lot of them out there that come fully furnished and allow you to negotiate many different terms. This allows you to have a vacation from your normal life while you’re looking for your next property. It’s a fun way to create a short-term transitionary period without having to move all your things twice.
4. A short-term rental. You can go to the Irvine Company, any type of apartment community, or even find a private-party landlord and request to rent their property for six months.
5. Buy first, then sell. I’d say only about 10% of our buyers and sellers have the ability to do this. After you move everything into your new home, you can sell your property as a vacant one. This is the best way to sell a property, but again, many sellers can’t do it.
If you’re looking to sell your current home and buy another property and are worried about the transition, my team has a solution for you. If you have questions about this or any real estate topic, don’t hesitate to reach out to me. I’d love to speak with you.