Buying And Selling A House At The Same Time
Timing is everything when you want to buy a new home and sell your old one. While you cannot control the complex buying and selling process, you can take steps to ensure smooth closings.
These are the key points to help you buy and sell a house simultaneously.
Assess The Local Housing Market
It is important to know the state of the realty market in your local area. This will help you time your home purchase or sale. It doesn't matter if you are moving within the same city or across the country. Knowing what market you are in is crucial. You should consider whether you are selling in one area and buying in the other. Depending on where you live, the time it takes for a buyer or seller to sell their property can vary greatly.
What Is A Buyers' Market?
A buyers market is where there are more homes for sale than buyers. You'll have a much easier time finding your next home in a buyer's market than selling your home. Sellers might be open to accepting a contingent offer. This means that you agree to buy their home if they sell yours first. More details later.
What Is A Seller's Market?
A seller's market is one where there are more buyers than homes on the market. As a result, your current home is likely to sell faster than the home you are looking for in a seller's market. To give you the time to search for your next place, ask your buyers to rent back your home after closing.
If you are in a seller’s market what should you do:
Buyers market:
Offer with a sale contingent.
Buyers market:
For a longer closing, please contact us.
Seller's market:
Offer with a settlement contingent.
Seller's market:
For a rent-back agreement, ask
Select An Experienced Agent In Real Estate
It can be difficult and overwhelming to buy and sell simultaneously. A local agent can help you determine the value of your house and will also be able to talk you through negotiation, timing, strategy, and strategy.
A Professional Agent Can Help You Determine The Listing Price
Your agent will answer your questions and help you negotiate. However, the most important role they play is to help find the right listing price. This will allow you to sell in the time and amount you want and make it possible to take the next step. The agent will use local market knowledge and comparables to help determine the price.
Interviews Are Important
Do not just choose the first agent who comes along. It's crucial to find a professional to help you make informed decisions, especially if you are buying and selling simultaneously. To streamline communication, you might use the same agent for both the buying and selling transactions if you are in the same market.
Know Your Financial Situation
Once you have chosen an agent and gained a good feel for the market, it is time to get to know your numbers. To find out what is possible based on your financial situation, reach out to your mortgage lender as well as your financial planner. You can choose which path to take based on how much liquid cash you have, how much equity you have, and what loan products you are eligible for.
Find Out The Likely Resale Price Of Your Home
Knowing how much your house is likely to sell in today's market is an important part of understanding your equity. Do a pre-inspection to determine the extent of work needed for your house before you sell it and what concessions you will need to offer a buyer to pay for those repairs.
Find Out How Much Equity Your Home Has
Do some research if you are selling a house that has a mortgage. This will help you determine how much equity you have. It is the difference between the current market value and the remaining mortgage balance. Consider whether you could purchase a home without having to tap into this equity. After the sale, equity in your home will not be available to you.
Before You Sell Your House, Consider Buying A House
Here are some options to help you buy a second house before selling your existing home:
Make an Offer with a Sale Contingency:
This scenario will allow you to focus on finding a home that you love before listing the old one. After you have found a home you like, you will submit an offer that includes a settlement and sale contingency. This means that you'll only buy the house if your current home is sold. The sellers of the house you are buying have the right to make other offers. Most contingencies work well in buyers' markets where the seller is less likely to get another offer.
Request an extended close:
If your home is likely to sell quickly, you may request a prolongation of the closing date. This will allow you to get the new house closed in 30-45 days. This will allow you to sell your existing home quickly and make use of your equity to purchase another home. This strategy is similar to contingent offers. As a result, you are more likely to succeed in a buyers' market.
Buy with savings:
If your financial situation allows, you can use your savings to make your down payment and then sell your home once the dust settles. Of course, you'll need to pay closing costs, inspections, moving costs, and other expenses.
Purchase with HELOC:
The HELOC (or home equity line credit) allows you to borrow against your home's equity. For example, you may be able to use a HELOC to get money for your downpayment, and then you can pay it off when you sell your home.
Purchase with bridge loan:
A bank may offer a short-term loan to pay your down payment until you close your sales. However, this product is not available from all banks and can be difficult to qualify for.
Rent your first house:
You don't have to borrow money to pay the down payment from your first house. However, you can always find renters to your old home. This would help you cover your mortgage costs and delay the sale.
The Benefits Of Buying Before You Sell
There's a place for you to go right now.
It is only necessary to move once. This allows you to save on storage costs and temporary housing costs.
There is less pressure to buy quickly, and you can stay put if you don't like the property.
Cons Of Selling Before Buying
It is possible to feel pressured to sell and take a lower offer.
Contingent offers tend to be less competitive in fast-paced markets.
If your home is not in good condition, you may not be able to make an offer.
It can be difficult to become a landlord if you rent out your home. It can be difficult to sell a home while tenants live there.
Before Buying A House, Sell It
Here are some tips to help you make the selling process easier if you have decided to sell your home.
Make a settlement contingent:
In this situation, you list your house first, and then, once you have an offer in place (but before closing), start looking for new digs. You will submit an offer that is contingent upon the sale of your current home. This is best when you are in a seller's marketplace, where you can expect to get offers on your current home quickly.
Search for a temporary rental home to live in.
You can sign a rent-back agreement:
You will agree to rent it back from the new owners for one or more consecutive days when you sell your home. This allows you to spend more time looking for your next home and still allows you to receive your money. This option is best for seller's markets, as buyers need to be more flexible about contract terms to secure the home they desire.
Selling Before You Buy: Pros
How much equity do you have to purchase a new home?
It is easy to roll existing equity into the purchase.
It is easier to focus on the next chapter and close the book than it is to close one chapter.
Selling before you Buy: Cons
You will likely need to find temporary housing.
Double moving and storage costs can add up.
