Thinking about selling your current home and buying a new one? If so, you are likely contemplating how best to navigate the process and asking yourself what it’s like to manage both negotiations simultaneously. It’s an appealing idea that can be made possible with careful planning.
There are ways to balance the process of home buying and selling to your advantage—as long as you evaluate your situation carefully. Here’s what to know before you begin.
Simultaneously Buying and Selling a Home Has Challenges
There are several factors that can affect how likely it is that you will be able to sell your current house and move into a new one at nearly the same time. It’s important to be realistic about them, so you can make effective decisions that benefit you and your family during this important time.
The Conditions of the Current Real Estate Market
Whatever is happening right now in the real estate market will affect how quickly the process of buying and selling a home takes place.
In a seller’s market, there are more buyers than there are houses for sale—which can make it faster to sell, but longer to successfully go to contract on a purchase. In a buyer’s market, the opposite is true.
Either way, though, there is likely to be a delay on one end which will make it hard to buy and sell at the same time.
Your Financial Situation
Home purchases are a major investment, and your flexibility in finding the funds will impact how easy or hard it may be to synchronize buying and selling timelines.
If you don’t have ample cash to spend on a down payment and mortgage, you may be able to take advantage of a refinance or a home equity line of credit, depending on your situation. But for many homeowners, selling a current home is a must before buying.
The Logistics Involved
Buying or selling property is a complex process with several steps, even in the best of times. Attempting to do more than one real estate transaction simultaneously means you are committing to doing twice the amount of work.
Also, a lot of things can impede your ability to negotiate a successful home purchase or sale:
- You can make your offer to buy a home contingent on your sale—but the seller may reject it in favor for another offer without contingencies.
- If the seller is also looking to sell and buy at the same time, the amount of logistics gets even more complicated.
- Delays can happen that require you to suddenly have to find a place to store your possessions or find a rental last minute, which can increase your overall costs.
For these reasons and others, many people opt to complete one real estate transaction before starting the next, rather than attempting to do both at once.
What if You Sell First, Then Buy?
As much as you may hope to time your home sale and new purchase so they are happening simultaneously, it may not work out. There are advantages to selling first that are worth considering.
There are fewer risks when you sell first because you’ll know exactly how much money you have to work with, based on the profit you’ve made and the loans you’ve paid off.
If you sell before buying, you eliminate the biggest contingency of all—a successful home sale—which makes it likelier your purchase offer will be accepted.
Be Prepared for the Gap Period
If you sell first, there will be a period of time when you will not have a permanent place to live. There are several ways to make this period easier on yourself:
- If your buyer isn’t moving in immediately, you may be able to rent the house from them.
- If not, look for a short-term rental property with a month-to-month lease.
- Rent a storage unit for most of your possessions, and only unpack the most needed items while you search for your new home.
Finding the right realtor makes all the difference in a successful home sale or purchase. Get our insider’s tips for choosing the right realtor, including questions to ask before you hire them.
What if You Buy First, Then Sell?
As with selling first, there are distinct benefits to buying first, then selling—if you can swing it. Here’s what to keep in mind.
No Need to Move Multiple Times
You’ll only have to pack and move once, which is definitely appealing. You won’t need to arrange storage or negotiate a month-to-month lease.
Plan Finances Carefully
Owning two homes at once is no easy endeavor. But it can be done if you have enough in savings for the purchase or can obtain a home equity line of credit or bridge loan. Consider carefully before taking this step, so that you do not find yourself financially strapped.
Request Contingencies or an Extended Closing Date
Some homeowners may be willing to accept a contract that will close only if you sell your existing property. If so, you may still have to accept the loss of all or part of your down payment to compensate the seller.
Keep in mind that closing dates are usually set for 30-45 days after the contract is signed and all contingencies are met. If you need a little more time, you may be able to negotiate a later closing date than that.
Get Pro Guidance to Ease the Home Buying and Selling Process
Whether you’re selling, buying or relocating, McGraw REALTORS can help. We provide expert guidance that simplifies home sales and purchases—so you can enjoy the process and love the results.
Discover more about our services, and find the right REALTOR for you in your area.