One of the most difficult maneuvers to do in San Francisco, for both agents and homeowners, is to sell and buy at the same time. If selling first, a seller can ask for a rent-back, meaning they get to stay in their home after they sell it, for an amount of time and at a cost negotiated between buyer and seller beforehand. But as the clock is ticking towards their agreed-upon vacancy date, the pressure to find a place is on. Finding a rental could take some of that pressure off, but then they could get stuck renting if they can’t find a place to buy. If they are renting, they are not building equity or gaining appreciation, and they’re not getting the mortgage interest deduction. Also, having to move all their stuff more than once is stressful and expensive.
If they can afford to, they can buy before they sell. That way they can buy when the time is right for them, and not be under extreme stress and pressure. But they can’t control the market when it comes time to sell. It may be a good time to buy but not necessarily to sell, or a good time to sell but not so much to buy. Once they have bought first they have carrying costs for both homes. So if they buy first, can they afford to just rent their previous home if they can’t sell it for the price they want? If not, if they need the cash or they just don’t want to rent out their previous home, they may need to be very clear about the type of market within which they are selling. Otherwise, incorrect pricing could cost them money by extra days on the market and carrying costs.
With a recent client, she wanted a seller contingency that said a buyer agreed to release her from selling to them if she could not find a new property to buy within a certain amount of time, like 14 days. Of course, this was a deterrent for buyers. The buyers didn’t want to get into contract to buy a place if the seller had the right to cancel. Normally the seller only has the right to cancel if the buyer is not performing according to the terms and conditions of the contract. She did find a place to buy and she also needed the seller of that property to agree to a contingency on the sale of her property- she could only buy the new property if she was able to successfully sell her current home. So we had to find a seller who was cooperative and willing to accept a contract with that contingency in place. Eventually, the whole thing worked because all the agents knew one another and we all knew that every person involved would do everything possible to make both deals work. This is a benefit of working with local agents who have long-standing relationships with one another. We know the work ethic and success record of other agents in the business. Doing a complex deal like this requires cooperation and some luck. It was not without risk, but we got it done.
Here’s the condo I sold for my client. 888 7th $580,000:
And here’s the one she bought. 49 Zoe $838,000: