WHAT ARE THE RISKS IF I WANT TO SUBMIT AN OFFER ON A HOUSE BEFORE I LIST MY OWN?
This is a very common scenario. After all, when most people buy a home, they buy with the intention of selling it for more, thus being able to afford something better. But doing this comes along with added pressure. Having your offer accepted means you must be prepared to put your current home on the market immediately. In addition, your home must be priced at market value in order to get an offer on your home as soon as possible. There is no time to experiment or test the market!
The first thing to do is ensure that the closing date for your future home is far enough out to give you the time to market and sell your home. In order for this to happen, the sellers of the new house must agree to this extended closing. In many cases, sellers prefer a quicker closing, as they themselves may have a need to move quickly. If they do accept your closing date, it becomes all the more important to list your home immediately.
If you have a great house in a great location in a seller’s market, the chances are high that you will receive multiple offers. In response to this, and to the desire to sell quickly, many sellers choose a time and date to review all offers, usually the Monday or Tuesday following the first weekend of open houses. If the home is priced right, this can result in a greater number of offers, as it gives many buyers the opportunity to see the home.
However, if you have already had your offer accepted on a new home, you may want to start showing your own home immediately, and accept the first offer that comes your way. There is usually one buyer so eager to see your home that they make the effort to get in the door before anybody else. If that buyer loves it enough, and you have not decided to hold offers until a specific date, they may want you to make a quick decision and accept their offer before your first open house.
To many, this eager offer looks like a sign that they will receive multiple offers, and it is then that they decide they will hold offers until after the open house. But there are risks to refusing. There are many buyers out there who have lost out in one or more multiple-offer situations. A buyer who seems eager may step away if they want to avoid another bidding war.
You can take it a step further: sometimes, the first offer is the only offer. When you go back to that buyer and ask them if they are still interested, they submit a new offer at a lower price. This does happen. Now, you have to sell for less, and you have lost valuable time to meet your obligations in buying your new home.
By submitting offers before your own home is on the market, you must be ready for the pressure to sell quickly, and you may not have the luxury of waiting for a selection of offers to choose from.