I often have buyers ask me whether or not to shop for and secure the new house now or after their existing home has sold?  This is how the age-old 'chicken or egg' question comes about.

The market conditions that make it difficult to sell your home right now are due mostly to just very little velocity – too few buyers buying. This is the same market condition that makes a new home builder interested in doing a very low margin deal.

 As the market improves for the prospect of selling your existing home, so too does the market improve for the new home builder – the person you are buying your home from. With this improvement, the new home builder becomes less interested in doing love, low margin deals.

So, it is my recommendation that you secure a fixed price as well as a price lock for 3 to 6 months with the builder. It gives him assurance that when your home sells, the builder can start construction on the new one. Without doing the upfront work to secure the great deal on the new start now, when your house does sell, you’ll be that much further behind and may, in fact you may end up with less house for the same price in the long run.

Most builders are willing to lock a price on a new start for a period of time while you get your existing home sold – that is, if your existing home is priced appropriately to sell. This lock puts you in a great position – no risk either way. If you sell your house, you know you’ve  got the low price secured on the new one. If your home doesn’t sell , you’re still not out anything since you’re not obligated unless your house is sold. Many clients I work with are faced with exactly the same dilemma and have chosen to proceed with the pre-construction work while they are selling their existing home. They are then ready to dig a hole the moment their home is sold. It works out quite smoothly.