Mastermind for April 4th. Buy or Sell First?
Buy first or sell first? That is the question of the day and our topic for this morning’s Mastermind meeting. It’s a pretty loaded question with implications for each scenario, and given today’s frustrating market, one that is most likely causing some sleepless nights for buyers and sellers everywhere. if you missed Mastermind, you missed a great discussion plus an opportunity to listen to the opinions of not one, but four Bosley Managers who just happened to be in the neighbourhood.
The topic started when an agent mentioned that he was working with a client who was interested in buying a bigger home but wanted to make any offer conditional on selling his current home. If you’ve been in the business for less than ten years you may have heard of such a thing in Toronto but may never have actually seen it happen. Trust me, it was the norm back in the early nineties. (yes, I’ve been around that long). In many ways buying on condition of selling isn’t such a bad idea because, right now, finding a home is probably the hardest part of the purchase. Of course if you are one of ten offers on a particular house it is unlikely a seller will even look at your offer. I won’t say it is impossible because any condition can be bought at the right price. Here’s what I mean; suppose your client insists on buying with a condition on the sale of his property. He might be able to pay more for the privilege of having time to dispose of his current home. Depending on the circumstances of a seller, perhaps one who is in no rush to move, they might accept this offer provided there is an escape clause. Essentially, an escape give the buyer two or three weeks to sell their home. At the end of the time period, the seller is free to look at other offers and if one was acceptable, he would have to give the first buyer an opportunity to either firm up or walk away. Ok, fair enough. Still it is a tough haul, especially if there are multiple offers or the seller needs to move quickly.
What can you do if the client won’t listen to reason? Perhaps it is time to isolate the client’s fear . Maybe the client is worried about being homeless. That is a huge, and understandable fear especially for a client with a big family. Maybe the idea is to reverse the solution. Instead of buying with a condition of selling the current home, the client should consider selling the existing home with a condition on finding a new home. Does that make sense? Once again the privilege may cost the client a little money as potential home buyers may want to pay a discounted price for having an open closing. Do you think the idea is far-fetched? Believe it or not one of the agents in our session recently came across just this scenario. There is one obvious benefit to this strategy; you know exactly how much money you have for your new purchase.
As usual, I value any input you would like to share on this topic. Have a great and successful week.