Advice on trading-up process

gok

Hi - we own our house and are contemplating with the idea of trading up. We'd want to sell our house and use the proceeds + extra cash to buy a more expensive house.
We recently saw a house we liked (executor sale) and made an offer to the estate agent but the estate agent effectively told us to first go and sell our house and then come back with a cash offer - told us that this was how the market was running today, people sold their houses, rented for a bit and then made cash offers.
We were quite unhappy with this as we have a family and don't like this whole concept of uncertainty of renting for an undefined period of time and having our fingers crossed that we'd still get the house we were interested in once we'd sold our own. It sounds like a very convenient situation for the estate agent not to have a sale contingent on another.
My question - is this type of situation the current norm? that is where estate agents are pretty much only dealing on cash offers?
what is the typical trading up process?
Thx
~/ G

silja

Pretty common. Bridging loans are a thing of the past. You cannot be certain to sell your home in time for closing on the other.

Do you have an offer on the current house? Have you had a recent valuation?

antiskeptic

gok wrote: »

Hi - we own our house and are contemplating with the idea of trading up. We'd want to sell our house and use the proceeds + extra cash to buy a more expensive house.

We recently saw a house we liked (executor sale) and made an offer to the estate agent but the estate agent effectively told us to first go and sell our house and then come back with a cash offer..

You didn't say whether the agent accepted the price offered. Let's assume he did. Given that he is an estate agent, he'll know what price you have to put your house on the market at in order to be considered a serious seller.

If you reveal yourself as a serious seller (by putting your house on the market at a sellers price) then the only thing you'd be bridging is the time it takes for a serious seller to attract a buyer. This shouldn't be too long - given the amount of wishful thinking in the seller market today.

Use this as leverage for a sale agreed. The more realistic a seller you are, the more likely the agent is to play ball. Indeed, you're preparedness to sell low will encourage the agent to sell to you .. low. He's going to get the majority of his cut on a sale - not on maxing the sale.

See if you can "lubricate" the process by letting this agent be your selling agent too. So what if you have to sell at 10% lower than you expect if you can buy at 10% lower than you would expect. The agent getting a seller and buyers fee will be encouraged to go in this direction.

antoinolachtnai

I do not think that putting your house on the market at a low price will give you much leverage. The issue isn't really your leverage, it's the executor's leverage. Once he commits to selling to you, he has to take the house off the market and loses all leverage. He will not do that unless he has something to gain. He has nothing much to gain from agreeing to sell to you for money that you do not actually have.

chicken fingers

Dont, dont dont sell your house with the same agent who is selling the house you want to buy.
That was awful, awful advice.

Jo King

Trading up means sell your own house, then buy.
In executor sales the house is often unoccupied and there are a number of beneficiaries waiting for a payout. They will not agree a deal unless there is a high probability that it will go through. if you have to sell, there is the possibility that your own sale will be protracted by purchasers unable to come up with the money on time or at all. You would be utterly foolish to sign a contract with the vendor of the executor sale which did not make it a condition that the entire was subject to the sale of your own house. Many individuals found themselves paying to mortgages over a lengthy period because the first house did not sell.

it has now reached the stage that only when the money is in your hand after a sale can you proceed with any certainty. A signed contract by the purchaser is no guarantee of payment.

daltonmd

gok wrote: »

Hi - we own our house and are contemplating with the idea of trading up. We'd want to sell our house and use the proceeds + extra cash to buy a more expensive house.
We recently saw a house we liked (executor sale) and made an offer to the estate agent but the estate agent effectively told us to first go and sell our house and then come back with a cash offer - told us that this was how the market was running today, people sold their houses, rented for a bit and then made cash offers.
We were quite unhappy with this as we have a family and don't like this whole concept of uncertainty of renting for an undefined period of time and having our fingers crossed that we'd still get the house we were interested in once we'd sold our own. It sounds like a very convenient situation for the estate agent not to have a sale contingent on another.
My question - is this type of situation the current norm? that is where estate agents are pretty much only dealing on cash offers?
what is the typical trading up process?
Thx
~/ G

In fairness, you haven't made a cash offer. You don't have the cash, it's tied up in your house and this could take months to sell, I would wager that this is what the EA is telling you.

It's pretty much like a buyer making an offer on a property but having no loan approval in place.

daltonmd

f9710145

What we did was find a house we liked, sussed out how much other interest there was in it (none), told the EA we were interested and would look into getting ours on the market, 8 weeks later we had an offer on ours so made an offer (lower than we were willing to pay, said we'd get back when we were sale agreed) on the one we wanted, just so they believed we were interested, then when we went sale agreed on ours (at €5k more than original offer) we upped our offer by the same €5k (to the price we were happy to pay) and went sale agreed then. That was early June, deals only going through this month.
So put yours on the market and try to sell as quickly as possible and once you have an offer you can offer again on the one you want. See if you can find out how much interest there is in the property as if there are plenty of others looking for it then you may be in the worst position with having to sell your own house first, but if there's no other interest then it may work out for you.

Bigcheeze

It's not just the EA, the sellers don't want to deal with buyers in a chain.

I've viewed houses where offers 20k lower than the highest bidder were accepted because the lower bidder is a cash buyer.

Idbatterim

if you are not in a rush, would you not be better of putting your lump of cash in decent interest bearing account and waiting until atleast after the budget? given the fact that you are upgrading, the longer you wait, the more you save. Yes you will get less for yours, but you also pay less for the upgrade...