Buying & Selling at the Same Time
Timing is really everything when trying to buy and sell a home simultaneously. While you can’t control everything that happens during these processes, there are things you can do to ensure there is a happy ending. If you are really lucky, you may close on your home and close on the new home on the same day. For those who are new to this, here is a survival guide on how to navigate buying and selling at the same time.
Know the Market
Before you start searching for your next home or put your current home on the market, make sure you know the housing market in the area. How you proceed will depend on whether the seller or the buyer has the power in the market. Try to find multiple homes, so that you have a fallback plan in case your purchase falls through. You should also hire an appraiser. When you are buying and selling at the same time, you don’t want to overprice your current home because if your current home doesn’t sell before you move into your new home, you’ll be paying two mortgages.
If you’re ready to begin this process, please don’t hesitate to get in touch with me!
Plan a Schedule
Should you buy first or sell first? Each choice has both benefits and risks. Selling your home first makes obtaining a mortgage easier, but you will also need a temporary place to live. Buying first means moving will be easier, but it will alter your debt-to-income ratio, which may make it tougher to get a new mortgage – you will also have to pay two house payments.
Remember that there will be other parties involved, such as the buyer for your current home and the seller for your new home, who may affect the timeline of the process. Your buyer may have trouble obtaining a loan or the seller may have to fix things that came up in the inspection. Just be prepared for things to happen unexpectedly. Having a trained real estate pro at your side will also help push the process along.
Know Your Finances
If you choose to sell first, the process is very straightforward, but if you choose to buy first, a realtor can help you understand your financial burden and risk.
Remember “Contract Contingency.” This means buyers can negotiate that their new home purchase be dependent on the successful sale of their current home. This is a great option, but if the seller is seeing a lot of interest, they may not agree to that term. If the seller isn’t getting any bites, this is a good option.
What about Bridge Loans? Bridge financings allows you to own two homes at the same time if you don’t have the funds for a second down payment. This is a great option if the money you receive from your first home is going towards purchasing your second home. This is a short-term loan and has to be repaid upon the sale of your current home.
Let me help you navigate through the waters of buying and selling a home at the same time. Ask me anything!
So, should you buy first or sell first?
Each choice has both benefits and risks. Selling your home first makes obtaining a mortgage easier, but you will also need a temporary place to live. Buying first means moving will be easier, but it will alter your debt-to-income ratio, which may make it tougher to get a new mortgage – you will also have to pay two house payments.
Remember that there will be other parties involved, such as the buyer for your current home and the seller for your new home, who may affect the timeline of the process. Your buyer may have trouble obtaining a loan or the seller may have to fix things that came up in the inspection. Just be prepared for things to happen unexpectedly. Having a trained real estate pro at your side will also help push the process along.
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