The process of buying and selling a home at the same time might sound like a nerve-wracking experience. If you’ve never attempted multiple transactions simultaneously, you might have some questions. Should I list my current home for sale first? What happens if the sale of my home falls through before I close on my new one? Is this a process I should complete on my own?
No matter the current market or your confidence level, my years of experience as a trusted real estate professional will answer your questions and concerns and help put your mind at ease. Read on for some easy-to-follow tips to make your real estate journey much simpler!
1. Buying your new home first is often the easiest path
If your wallet allows it, securing your new home first is typically the way to go. For those who might already have their current home’s mortgage paid off, this takes the stress levels down a notch or two. This method lets you focus your efforts and attention on finding the perfect new home and dealing with the distractions of preparing your current home for the market after the fact.
2. Selling first
However, if you still owe money on your current home, this can create a financing issue with the lender on your prospective property. Typically, you’ll need to demonstrate to the lender that you have at least six months' worth of payments on both properties liquid. Additionally, you’ll have to show that you have the funds for closing costs and the down payment on the new home.
The home sale contingency
If your financial situation requires that you sell first, there are some complications at play. Selling your existing home can take a bit of time, especially if your area is experiencing a buyer’s market. In an ideal world, you could strategically time your sale to avoid carrying the burden of two mortgage payments at once. However, you might find that perfect new property before your current home receives offers. What then?
Don’t worry! I will work with you to include a home sale contingency in your offer on the new property. This means that the transaction will only move forward when your current home sells. That way, you can make your offer with confidence, knowing that you can walk away from the transaction if your home doesn’t sell within a certain time frame.
Consider renting your current home from the new owner
On the flip side, what if your home sells too quickly? Imagine the stress of selling your home before you’re able to close on the sale of your new one. Where will you go? Over the years, I’ve learned a trick or two about how to eliminate the stress from this scenario, should it happen.
When your home sells faster than you can close on your new one, it can create some potential issues. When this is a concern, there’s always the rent-back contingency to consider. As a stipulation of the sale, you and the buyer agree that you will pay fair market rent for the home. It’s typically an additional 30 to 60 days, giving you enough time to buy and move into your new place.
Of course, I advise my clients that not all buyers will be open to this idea. After all, many of them are just as eager to move into their new home as you are to move out. In this case, you’ll have to make a choice — you can wait for a buyer who will be open to the rent-back agreement or pay for a short-term rental elsewhere. Either option should be carefully weighed out, with your final decision based on a number of variables like the current housing market, your finances, and your timeline.
3. Careful planning is the key to less stress
There’s an old adage that reads, “Expect the best, but prepare for the worst.” When it comes to buying and selling a home at the same time, nothing could ring more true. The process of just one transaction can be hectic enough, but when you are tackling both at once, you’ll want to be sure to plan everything out ahead of time to reduce the level of stress.
Thankfully, you don’t have to go it alone! The first step in this process is to find a team of professionals to work for you. As an experienced Realtor, I have the connections that count, from home inspectors to financing professionals to title companies. You’ll want a trusted team on your side so that you can sell your home as quickly as possible while finding and winning over your new property.
I will support you every step of the way, offering local expertise and insight into neighborhoods and upcoming properties that align with your wish list. I have what it takes to win in a competitive market, helping you devise solid offer letters and using effective negotiation strategies. Closing dates are certainly negotiable and will be a critical part of my planning techniques.
Remember, it’s essential to have a backup plan. It’s a great idea to have a temporary home in your back pocket — somewhere you could move to for the time being if the closing process on the new home is delayed. Also, I strongly suggest having enough cash available to make two mortgage payments for several months, should the sale of your current home fall through or stall.
4. Work with a trusted professional when buying or selling your home
While the prospect of buying and selling a home at the same time isn’t one to be taken lightly, I encourage all buyers and sellers to give a trusted professional the opportunity to provide their expertise. I will guide you toward making wise selling decisions as I market your home effectively, help you navigate financing, and connect you with fantastic properties
. I’ll be there at your side from day one. So, if you’re ready to begin exploring your options, give me, Kaili Sanchez
, a call.
*Header photo courtesy of Kaili Sanchez