If you’ve ever bought a home, or you’re currently in the buying process, you’ve probably heard your Realtor ask you the following question: “Do you have a home you need to sell before you buy?” At first glance, that question makes perfect sense. After all, many people who are moving from one home they own to another will need the proceeds from the sale of their current home in order to afford their new one. There’s more to your Realtor’s question than you might realize, though!
The reason we ask our clients this question is not just financial; it’s because of what we like to call “the domino effect.” Homes aren’t bought and sold in a vacuum, and chances are good that the people who are selling the home you’re buying are going to need somewhere new to go as well, and if something goes wrong with their purchase, it can affect everyone down the line.
For example, let’s say Alice and Bob are first-time buyers, and they find the perfect home. The sellers, Cathy and Dave, have outgrown their starter home and they’re ready to move up. Once Alice and Bob sign a purchase and sale agreement to buy Cathy and Dave’s home, Cathy and Dave make an offer on a home owned by Elizabeth. Since Cathy and Dave are working with a great Realtor, the sale of their current home to Alice and Bob is contingent on Cathy and Dave finding suitable housing (in other words, they can’t finalize the sale of their current home until they have somewhere else to go). What that means is that if Cathy and Dave can’t go through with their purchase of Elizabeth’s home, their sale of their current home to Alice and Bob is in jeopardy. In turn, if Elizabeth is trying to purchase a home owned by Frank and George, and HER purchase falls through, everybody down the line all the way to Alice and Bob could be in trouble.
That’s why your Realtor really wants to know if you have something to sell, and why we check with the seller’s Realtor to find out what’s going on at that end. In order to give you the best possible service and make sure your purchase can go through all the way to closing, we need to follow the line of dominoes all the way to the end and keep our eyes on anything that could cause them to fall.