But even if you can sell your home for a great price (we are in a seller’s market, after all), many sellers in the Nanaimo real estate market will have one big task to worry about: having few options to buy. This is true for Island locals who are looking to downsize in retirement, as well asyoung families who need more room for a new addition to the family (and fast).
The Nanaimo real estate market is still facing a supply issue, just like the rest of Vancouver Island. This will take time to reach a state that is favourable to buyers.
Thankfully, there are other options available for buyers who are afraid of listing their home without another deal lined up.
Long completion is essentially a buffer period. When you list your home, you disclose to any potential buyer that you cannot accept any offer that completes within a certain period.
Let’s say you come to a long completion agreement with a buyer that gives you a 6-month buffer period to find a new home.
When you look for a new home in those 6 months, you will have a better chance of having your offer accepted. This is because the original agreement is already in motion (even if it doesn’t complete until the 6 months have passed).
However, this agreement can leave you exposed. If you can’t find a home within 6 months, you will have nowhere to go unless you have prepared an alternate plan.
Find A Home First
Some readers will realise that the long completion scenario carries significant risk and immediately think of a “better” option. “Why don’t you wait until you have found an ideal new home before you list yours on MLS and sell? It is a seller’s market after all…”
Unfortunately, this option is only realistic for those who can already buy a new home today with existing savings or assets.
A buyer needs to be able to prove without a doubt that they have the financing to move ahead with the purchase.
Even a high-valued home in a good market isn’t enough. You need a firm offer on your property before a lending institution will approve you.
A similar strategy that can work in some markets is when a buyer makes an offer on a property that is “subject-to-sale” of their existing home.
Sure, this removes any risk from the buyer’s perspective.
But there is almost no reason why a seller would accept it in today’s real estate market in Nanaimo.
When there are a half dozen (or more) offers on the table, why would a seller accept a “subject to” offer of any kind?
An offer like this could blow up in their face at any time, and sellers aren’t interested in trouble like that.
Another option that can work in some situations is a rent-back agreement, where the buyer allows you to rent the home from them until a certain date.
Most rent-back agreements last for under a year, but it is difficult to predict how the buyer will react to the idea.
This has a better chance of happening than the subject-to-sale agreement since as a seller, you are in a favourable position.
But you can’t be sure that a buyer will accept this kind of offer.
A rent-back agreement must come with a Plan B. Otherwise you could find yourself fielding many good offers for your home, and be forced to deny them since you don’t have anywhere to go.
Now that we have talked about some of the issues with conventional contact-based solutions to this problem, it’s time to look at some workarounds.
In a difficult market, you may have to make compromises while you find your perfect new home.
You can technically make a subject-to-sale offer work if the property you are looking to buy is less attractive than the average.
This could mean looking at distressed property. Distressed property is on the brink of foreclosure, or is already owned by the bank.
This does not mean that the property will be in an advanced state of neglect, or that it will require a teardown. Many distressed properties are simply bad financial decisions made by previous owners.
Look for properties that have been on the market for one month or longer to find situations where you can make a subject-to-sale deal work.
House Sitting Arrangement
Even if you don’t have immediate friends or family who you can offer to house sit for, you can reach out to a company that pairs homeowners who are on extended work assignments or sabbaticals with reliable sitters.
This arrangement may not be best for families with children or pets, but for those who are more flexible, it can be ideal.
Some house sitting arrangements are paid, which can make up for the cost of storing your belongings until you find your new home.
Short Term Rental
For retirees or work-from-home professionals, this option can work well. Find a place to live with a month-to-month short-term lease (or even a vacation property), and take your time finding the right home.
Two large downsides of this strategy are the hassle of having to move twice, and the tough rental market on Vancouver Island.
If you are looking to downsize anyways, this is an opportunity to clear out your belongings while you move out.
Look in less competitive rental markets, which likely means outside of Victoria and Nanaimo. Cities like Ladysmith, Parksville, and Duncan will have comparatively lower rent while still being accessible for checking out new properties.
Finding Your New Home
If there’s anything that we can guarantee in the buying process, it’s an experienced realtor who deeply understands the Vancouver Island real estate market.
Want to learn more? Get in touch with Jeff King today.