You are planning a move to Salt Lake City, Utah for a new job. You have put your existing house up for sale. Meanwhile, you’re working with CityHome Collective to find a new place in the Beehive State. It is easy for you to view your own situation in isolation. But know this: when it comes to real estate, buying and selling involves a chain reaction that can drive you crazy.
The dictionary defines a chain reaction as a series of events that are in some way linked together to the extent that one event triggers another. Real estate transactions certainly qualify. Remember that for every seller there is also a buyer. For every buyer there is also a seller. And in any real estate transaction there could be multiple people whose decisions are influenced by the actions of others.
Things get tricky when multiple parties are buying and selling simultaneously. If you look at it as an algebraic equation, it’s easy to see just how complicated things can get.
Meet John and Susie
John and Susie own a Salt Lake City home you are interested in buying. They are looking to sell in order to upgrade to something large enough to accommodate a growing family. They have already contracted with a builder, so now they need to sell their home. They are hoping to avoid offers with contingencies. Why? Because they cannot afford for a sale to fall through. They have already committed to building.
You Want to Buy
You and your spouse are thrilled with John and Susie’s home. You absolutely want to buy it, but you have to sell your existing home as well. The last thing you want is two mortgage payments. Furthermore, having to facilitate an out-of-state sale after you move to Salt Lake City is only going to complicate matters. You want to make an offer on John and Susie’s house contingent on selling your own house, even though you know John and Susie don’t want contingencies.
What do you do? Do you eliminate the contingency in hopes that you will be able to sell your home in time? There are risks either way. Making an offer with contingencies comes with the risk of losing a house you really love. But offering without contingencies could jeopardize your finances.
Meet Bill and Marcia
Bill and Marcia are parents of two young children. They are interested in buying your current home. But guess what? They are also looking to sell the home they currently live in. They want to make you an offer contingent on selling their current place. It is a great offer that would give you plenty of money to put toward your Salt Lake City home. But what if Bill and Marcia cannot get a mortgage?
Their contingent offer could fall through, resulting in your contingent offer collapsing. Neither of you get the house you want. Meanwhile, John and Susie decide to sell to a cash buyer and move on.
All Sorts of Chain Reactions
The agents at CityHome Collective – yes, CityHome Collective is a genuine real estate brokerage in Salt Lake City – say there are multiple chain reactions in nearly every real estate transaction. The more parties involved, the more there are.
Buying and selling involves offers, title searches, attorney interactions, and tons of paperwork. Then there are lenders, appraisers, and others. Every hand in the pie represents the opportunity for another chain reaction that could foul things up. It is enough to make you crazy. In fact, it’s a wonder houses are bought and sold at all.