Selling on
Your Ideal Timeline

with Christine Sparks

Let’s be clear—real estate takes an absurd amount of dedication to succeed and the hours are long and unpredictable. Oh, and let's not forget the competitiveness of the industry and CHRISTINE SPARKS thrives in this fast-paced, ever-changing environment. She is both passionate and highly skilled at helping clients navigate the decisions and choices necessary to complete a successful real estate transaction. Christine uses her boundless energy in conjunction with the latest technology and trends to her clients’ advantage, handling the buying and selling of their properties with the utmost professionalism and skill.

At a personal level Christine is a wife to the sweetest and most patient man for over 20 years and the mother of three amazing (and mildly sarcastic) children. She holds degrees in both teaching (Lincoln Memorial University, TN) and Advertising Art (SUNY Farmingdale–Long Island, NY). She’s an avid reader and active within her community. Real estate, with all its challenges, is simply another in a long line of successes for this young (ish?), hyper-motivated professional.

Generally speaking, do you need to sell before buying a new home? The answer is perhaps. Perhaps your financial circumstances dictate you must sell before you can buy or perhaps you just aren’t comfortable buying before you sell. This is not the right solution for all but it is the right solution for some. 

The decision is personal, but for a lot of people, buying before selling provides the comfort and flexibility they need. 

Most believe they must sell before they can buy, but just the opposite can be shockingly beneficial. While it's not the best solution for everyone, it’s worth a consideration to consider potential costs that could be avoided if you purchase before selling. 

Not only are there some convenience and lifestyle circumstances where you might want to buy before selling but there financial benefits as well.

First, it increases the strength of your offer when you are submitting a bid on a property that is not contingent upon the sale of a current home. This affords you the opportunity to bargain on items such as price.

Second, you will have the time to find a home that best suits your needs. When you wait to buy until your home is already under contract, you might be scrambling to find your new home in weeks or sometimes days. This may force you to overlook aspects of a house that truly doesn’t fit your search criteria because you are under the gun to lock in your next home fast.

Third, you will have the ability to consider homes that may need some updates or improvement—and often the potential for sweat equity.. This works especially well when there are special circumstance like a particular health concern, like making a home wheelchair accessible or converting to a no-threshold shower.

Lifestyle situations where it could be
beneficial to buy before selling

• An older couple who has lived in a home for a long time is likely to own a lot of things. Downsizing and paring down belongings can take time.
• Families with school-aged children often want the kids to complete the school year before changing to another school.
• For families with homeschooled students or those with work-at-home careers, arranging times to show their home to potential buyers is challenging.
• When there are health concerns in the home, day-to-day caregiving can make showings almost impossible.

How to do it

If you have fully paid down your mortgage, it’s a clear-cut process. If you still carry a balance on your current mortgage, typically you must be able to carry both mortgages (the principal, interest, taxes, and insurance—PITI—on your current home, plus PITI for the new home).

These programs are called “recasting,” “delayed down payment” or sometimes they are offered as a portfolio product or in-house program, if you qualify.

Borrowers are required to put down 5% toward the purchase of the new home. Once the current home sells, they can apply those net proceeds to the new loan. The lender, for a small fee, will recast the remaining loan balance, after applying the net proceeds, or a portion thereof, over the remaining term of the loan.

Example:

• $500,000 new loan amount on a 30-year term
  (360 months)
• Re-Cast: $100,000 in net proceeds applied
  to the principal balance of the new loan
  perhaps 3 months later
• New Loan: $400,000 recast over the remaining term (in this example, 357 months)
  which essentially lowers the monthly payment to what it would have been if the borrowers had the $100k at the time of closing 3 months prior

Generally speaking, the fee to recast is $350-600, depending on the service provider, which is obviously much less than refinancing after purchase to apply the curtailment.

** It is important to note this is different than a bridge loan.
Consult a qualified mortgage professional for guidance.

Getting started

Okay, so you have decided this is the best route for you and your family. Where do you begin?

Here is a sneak peek into our 4-step process. It is slow and methodical in preparation and planning so you can be quick at the end when the magic happens.

Step 1: Staging

Months before you are ready to purchase, formulate a plan to prep your home for the eventual sale. Have a stager come out and provide a consultation. Recommendations can include repairs or updates needed, paring down extra furniture or basement/attic items, painting, etc. Quotes and estimates are obtained and the work is scheduled.

Marketing prep includes scheduling professional photos, completing a home-tour video, creating feature sheets, and all print and media marketing.

Step 2:  Financing

Get your financing approved. Numbers are everything. Wanting a new home is fantastic but it’s all about the numbers. I always estimate a sales price conservatively, because I want you to work from a worst-case scenario—even though I’m always going to sell your property for a much higher price… but then it’s just gravy. 😉

Step 3: Buying

Then we go to the buy-side and find a home that is the perfect fit for you. When you get excited about moving to a new home, it can be emotional. That’s the beautiful thing that happens when you discover a house you love.

Step 4: Selling

Immediately after you complete home inspections on the new property and know you’re moving forward, then place your current home on the market. Since you proactively completed the pre-marketing at the beginning of the process, generally speaking, your home can be sold within the first few days.

Most of the time, before I help clients even start looking, we talk and make sure they qualify to carry both homes. We also develop a what-if contingency plan, but my goal is for you to not ever have to use it. 

Prior to finding your next home we get everything prepped and ready to go on your sell-side so we can focus on finding your dream home. Then immediately, once you’ve got the new property under contract, we start marketing the home you currently live in.

Our goal is to almost simultaneously, or very shortly after you move, close the sale on your current home. In that case, since you get that first month of mortgage free, you may never actually carry two mortgages.

Skills to look for in a Realtor

You need to look for a real estate agent who legitimately has a plan and vendor relationships that can offer the types of products you will need—home stagers, decluttering consultations, contractors for repairs, professional photography, and marketing. Making sure your home is prepped for speedy sale is the most important part of the process.

The best agents also have an in-house staff that specializes in your selling situation and also understands your buying situation. Together they can manage not just the marketing and sales of those two properties, but also your personal timeline of repairs, moving, and closing funds. There are lots of moving parts in this process!

Making everyone happy

I worked with the Bensons off and on for years. The husband wanted waterfront property but the wife hated water and wanted acreage. It was important to each of them that the other was happy, so we would bounce back and forth, never quite finding something they both liked.

Then we stumbled upon a waterfront property that was on a couple of acres. It was the right amount of land and the ideal location, but the wife hated the actual house. 

In frustration, they started thinking about buying an empty lot and building a new home. It was killing me. I could see the potential for the waterfront property on the acreage. The property had a gentle slope to the water, with year-round deep water looking out onto the main channel. It was absolutely breathtaking. 

We scheduled an appointment with one of my design consultants who was able to help the couple meld a vision of what the home could become after renovation. We were able to show them how they could make this the home of their dreams while they stayed in their current home.

During the consultation we:

• Developed an understanding of the clients’ aesthetic
• Analyzed their budget goals and confirmed the had sufficient funds for the remodel
• Brought in trusted contractors and vendors to ensure the remodel could be completed within the required timeframe. 

We determined all the changes that both the husband and wife wanted could be made within their timeframe… while also staying within their budget. It was all systems go on the dream house! Time to focus on their current home.

Together we created a plan. They preferred to wait to list their home until the remodel was mostly complete. However, we didn’t want to wait until the last minute and risk missing the opportunity to get top dollar for their current home. Knowing market conditions can change in the blink of an eye, we agreed to check in periodically. 

Thankfully all the metrics indicated it was a seller’s market, and in fact inventory was reaching record lows. It was prime condition to sell, plus they’d had the benefit of buying before the market values rose. It was the perfect scenario.

Approximately one month prior to completion of the remodel, we listed their house kicked our marketing into high gear. We focused on the home’s unique features, specifically the pool and outdoor pavilion and kitchen. The backyard was divine and we played off scarcity and created a bidding war. 

Because of our propriety marketing plan, guaranteeing we would sell their home over the average price in under the average days—drama free—their home sold for more than any other in that neighborhood. Our prelisting marketing plan created an auction-like experience.

The couple was able to enjoy their existing home until the moment their remodel was completed, knowing we would get their home sold when the time was right for them. Our team stayed in contact throughout the renovation process, constantly monitoring the market for changes, and assessing the right time to list.

The end result was the stuff of dreams—the kind of stuff other agents without the experience and connections tell you can’t be done. The Bensons were able to procure their dream home, tailor it to their personal needs and aesthetic, and then wait to move in until after the remodel so they never had to live in a construction zone. Oh, and they sold for top dollar!

Reasons to work with us

If the idea of buying before you sell sounds appealing and you would like to discuss further, give us a call! This is just a small portion of our home-selling process. We create a customized plan tailored to your needs.

It's often better to buy before you sell and this process can works seamlessly for you. Finding an agent who fights to find a creative solution for you and has proven track record of success doesn’t have to be hard. One thing is always the same—take it slowly on the front end to speed things up on the back end.

Whether you buy before you sell or after, we are able to create a marketing plan that gets you above-average price in below-average time—drama free.

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If you're buying and selling in the Phoenix Area, Call The VanAssche Group at 480-588-8288 or email team lead and Broker Associate David VanAssche at David@PhoenixAreaHome.com