Published on 09-19-2016
Preparing a home for the market requires careful planning and execution. Sometimes, the plan works too well and you find yourself selling your existing home before finding your next home. Or, you need to close on your existing home before the builder has completed your next home. Both situations can leave you feeling with a terrible sense of unease and throw your everyday routine into chaos. Here are a couple of solutions that will keep you and your belongings out of the rain should this happen to you.
Short Term Rentals
While the thought of signing a short-term lease sounds obvious, the reality is that very few landlords are willing to provide short term housing. The reasons for this are many, but some of the more common reasons given are the very costs that you may have incurred in getting your own home ready. Painting, flooring, cleaning, etc. can be expensive. Spreading those costs over a 1-3 month rental would drastically raise the rate of the rental and make it too costly to keep it rented regularly. Add on a leasing commission of 8-10% (annualized value) and you see why a short term rental is unattractive for a landlord.
How to Score a Short Term Rental
The key to persuading a landlord to accept a short term rental is flexibility and lots of planning. The main reasons landlords avoid short term rentals is economic. Well why not turn that objection upside down and make your short term rental make them more money? Most landlords will advertise rentals well before they become vacant. That way they can reduce the length of time that property sits empty and not generating income. Call those ads and arrange to move into the property before they paint or clean it. Assuming it’s in decent shape, this could drastically reduce the risk and cost of doing a short term rental. You may not have freshly painted walls, but it’s only temporary. Besides, it’ll help you appreciate your new digs that much more.
If you can’t find a short term rental, don’t despair. There are other solutions.
Renting Back Your Home
This next solution requires a willing buyer, but today’s market may be perfectly suited for it. We all know that inventory is low and buyers are having trouble finding a suitable home. This has motivated some buyers to begin their home search much sooner than they otherwise would. If yours turns out to be one of these early bird buyers then you may have an opportunity to rent the home back from them after the closing, thereby buying you some additional time. The main drawback to this solution is that most owner-occupant loans require the borrower to move in within 60 days of closing, so this is only a very short term solution. However, it has the added benefit of keeping your stuff right where it is, eliminating moving expenses, and it’s the least disruptive to you and your family, not to mention that the monthly rent may be more in line with market prices than other short term rental options.
I was recently involved in just this type of transaction. My clients were buying but were concerned about having enough time to find the right property. If they found a home too early, they were looking at paying both a mortgage on their new purchase and a lease on their existing apartment for nearly three months. We did find a home quickly, in the first two days, but were fortunate that the Seller had a home that wasn’t ready for her to move into before mid-to-late November. It was a win-win for both parties! The seller was so happy how it turned out that they left behind a rather expensive, new refrigerator for my clients!
It’s not a glamorous option, nor the most desirable one, but if necessary you may be able to move your belongings into your garage, for a limited time, while you make other arrangements. Some buyers, especially first time home buyers, haven’t yet accumulated enough stuff that requires immediate access to a garage. This option leaves your belongings in a rather insecure spot, but as they say, beggars can’t be choosers.
As with most things in life, preparation and advance planning is key to success. Even if you only have a vague idea of what you would do in the event that you had to move sooner than expected, having a plan will greatly reduce your stress and improve your clarity of thought. Prior to listing your home, you should:
As a last resort, take your family on vacation or make arrangements at an extended stay hotel. This could be the most expensive option, but if there’s no other choice it beats sleeping on the sidewalk. It goes without saying that selling a home can be a stressful endeavor. Be sure to work with your agent and plan ahead. You’ll be better off, your family will thank you for it and your stuff will, too!