Q: We have signed a contract to purchase a home, and the sale is supposed to close next month. The problem is that we have not been able to sell our current home because sales in our area are slowing and buyers are making only low-ball offers. Would it make sense to rent our current house out to tenants for a few months until a serious buyer shows up, or should we just reduce our asking price now in order to make a quick sale?
A: The nation's softening housing market has left many people in the same position you find yourself in today.
It's difficult for me to give a detailed response to your question, in part because your letter doesn't state whether you need to sell your current house in order to get the cash needed to purchase the new one.
However, if you're like most sellers who find themselves in a similar situation, it would probably be better to cut your asking price now to induce a quick sale rather than keep the home and hope that a buyer who might offer a better price will materialize later. Your letter states that sales in your area already are slowing, so it's certainly possible that the local market could get worse before it gets better.
Further, most "good" tenants seek the stability of a minimum six-month or one-year lease; they probably wouldn't be interested in renting your house if there's a chance that they'll have to move again if you find a buyer in the next 60 or 90 days. And even if you can find someone who's willing to take the place on a month-to-month basis while your efforts to sell the home continue, there's no guarantee that the tenant will cooperate when a prospective buyer wants to view the home or that the place won't look like a pigsty when the buyer shows up.
My advice might have been different a year ago, when sales in most areas were strong and prices were climbing. But with the market in your neighborhood cooling, it would probably be best to cut your asking price now to find a buyer quickly rather than rent the place out and hope that prices start rising again soon.