She wanted both and had neither. Her current house was a townhome purchased twelve years earlier. It worked great at the time, but now … not so much. She wanted to grow some veggies and plant some flowers. She didn’t want common walls any more.
So, she looked into selling her multi-family abode and moving in to a single-family place with a yard that gave her the two things she wanted most.
Without knowing the term, she was looking for “right-sizing” where people move up or move down or just move around to get into a new place that is right for them given changing life circumstances.
Her whole adventure got off to a rocky start. The first agent she consulted pressured her to get her townhome on the market right away. She had butterflies.
Things got worse when she consulted the agent’s recommended lender. He started talking about how she could raid her savings, borrow from her 401k and buy a new place and keep the old one as a rental. He was throwing around a bunch of jargon. The butterflies were morphing into heart palpitations and migraines! Mostly, she was confused.
Things got better when a 2nd agent arrived on the scene. She started off by doing a “feasibility study” for her. A feasibility study shows the cash you’ll probably have in hand after selling AND what payments and cash out-of-pocket will be required to buy the next home.
The 2nd agent came up with a conservative estimate of the sale price and net proceeds from selling the townhome. Based on what she learned about what Terri wanted in her new place and her comfort zone for monthly payments, she determined the price range she could afford.
She then presented it all in a brief two page summary. You can see a sample feasibility study HERE (just a sample – not Terri’s actual numbers). Also, he showed her, online, some representative homes that could work given her wants and needs.
She then discussed options:
- Sell first and then buy.
- Buy first and then sell.
- Make a coordinated sale with simultaneous purchase.
- Buy and keep the old place as a rental.
Every client has different resources, needs and risk tolerances that dictate which strategy is best.
After some discussion with the 2nd agent’s lender, she had a game plan. She would sell and hope to find the replacement place simultaneously so she could move right out of one and into the other. If the right place did not pop up in time, she had temporary living arrangements available. She preferred that inconvenience to liquidating savings to buy first and potentially end up owning two pieces of real estate for a while. She knew she did not want to be a landlord.
The 2nd agent provided two critical services every real estate client needs: Consultation and Clarity. She didn’t do the stereotypical sales guy thing – hurry up and buy or hurry up and sell. He took a step back and took time to consult by finding out needs and laying out options. Furthermore, she did it in a way that gave Terri clarity on her choices and let her pick that path that was right for her.
The ability to do this requires that an agent have the right mindset and the right tools. I can provide you with both so I can help my clients get on with what’s important to them … like gardening and privacy.
What’s important to you?