We are in the worst market I have experienced since I started in the business in 1983. My welcome to real estate was interest rates that shot up to 18% and even higher. There was a lot of creative financing out there, and homes were still being purchased. The good news is that those high rates didn't last very long, and the market got back to normal much quicker than what we are experiencing today.
There are way too many homes up for sale than buyers that can qualify for a mortgage. The lower priced homes are in competition with a slew of foreclosures and short sales so it's very hard to compete. If those sellers cannot sell their homes then they can't move up to the next home. It is a vicious circle, where you have to be priced really well and your house must show beautifully in order to hope to get an offer. Buyers have so much to look at, you have to be the cream of the crop.
So let's say you want to sell your current home, and it really doesn't matter what price range it falls in - they're all hurting. You have to sell your current home before you can purchase the next one, but you want to get out and start looking so you have an idea of what is out there in your price range. You find a wonderful home and want to make an offer. But there's one problem, your house isn't sold yet.
A seller does not want to take up marketing time with a Contingent on Sale contract that might never come to fruition. The seller and their agent cannot guess how long it could take to sell your home, so they don't want to put their home in Contingent status since that will keep most prospective buyers away. They could wait months for you to sell your place and if you don't, the sellers have to start over.
It is much better to sell your home and then go out looking. Now you would have a Contingent on Close offer, which is a step above Contingent on Sale. You have your buyer and should have a normal closing time frame, which will hopefully coincide with the purchase of your next home. The problem would be if your buyer could not qualify or your home doesn't appraise and the sale becomes null and void. But some sellers will take this risk in this slow market.
Many buyers that have to sell first are afraid they won't be able to find anything quickly enough, or they'll end up settling on something that is not what they desired just to find somewhere to move to when they close on their home. In my opinion, there is enough inventory that a motivated buyer should be able to find something. When my husband and I searched for our Scottsdale AZ townhome, we had 3 days to look. In those 3 days we actually found 4 places we would have been happy with. I guess we're not the norm, but this is a risk you might need to take if you have to sell something first.
I've been meeting more and more buyers that need to sell first. Some understand that they need to get a buyer for their home before a seller will negotiate with them. Others are surprised that they will most likely not be successful with a Contingent on Sale offer. But would those same sellers want to accept a Contingent on Sale offer on their property? I would suggest that they don't because of the reasons I already stated.
If you would like to sell your Orland Park home or any other home in the southwest suburbs, give Judy Orr a call at708-536-8200. Judy can help you sell your current property and purchase your next one.