This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.
Q. We own a townhouse in Arlington and will be in the market for a house soon. The townhouse is located in Clarendon. We are looking to purchase in Arlington or Falls Church. Maybe McLean. How should we coordinate our sale and purchase so we don’t get stuck with two homes or end up homeless?
A. This can be a tricky situation. The best strategy for you is going to vary depending on the market and the options you have available.
I recommend that you start by looking at some homes for sale. Not necessarily to buy right away, but more as an exercise to confirm that you are going to be able to find what you are looking for. In others words, make sure that your budget aligns with your expectations about what is available on the market before moving forward with the sale of your current home.
In the markets you mentioned, it is going to be very difficult to be competitive as a buyer if you plan to make an offer with a Home Sale Contingency. You will have better luck selling first and negotiating a rent-back while you find and purchase your new home.
Below are some suggestions when it comes to pricing your current home and negotiating offers:
- Determine a price that will keep you from leaving money on the table, but also puts you in a position to attract multiple offers. This is where it really helps to have an agent who is extremely familiar with your local real estate market.
- Have your agent make it known to potential buyers that you will require a rent-back period. I suggest trying for up to 60 days. This is the maximum amount of time allowed by some lenders and it will provide you with about three months to find and settle on a home (assuming a 30-day closing).
- Try to negotiate an offer without contingencies or at least very short contingency periods. You’ll feel a lot more confident moving forward on your purchase once the contingencies are out of the way on your sale.
- Try to obtain a backup offer. Just as it sounds, this will provide you with a backup contract if the primary contract falls through.
Once you have a contract in place on your current residence, it is time to become very active in your search for a new home. Based on how clean the contract is for your Clarendon townhouse, you’ll have a much better idea how you should structure your offer on the purchase. You and your agent should determine if it makes sense to include a Settlement of Purchaser’s Property Contingency. This contingency is not as frowned upon by sellers as a Home Sale Contingency and it will provide you with protections from the contract if your current home does not close for some reason.
Figure out ahead of time what your plan B and C are if you aren’t able to find a new home. Do you have someone you can stay with temporarily? If not, you may want to look into temporary housing solutions like aka.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
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