What to Know When Buying and Selling a House at the Same Time
Buying and selling a house at the same time can be a daunting task, but often necessary. Whether you are relocating, upgrading, or downsizing, there are many things to consider when embarking on this journey. If you found yourself having to buy and sell simultaneously, we have broken down the steps to take and the overall process to help transition with ease.
In most cases, you need to sell your current home to purchase a new one. Regardless of the reason why, selling and buying a home at the same time is stressful, you do not want to end up paying two mortgages, and you do not want to sell your house too quickly and end up worried about where you and your family are going to live until you have secured your next home.
Know the Market
One of the key factors in timing your home purchase or sale is the state of the local real estate market. You want to evaluate the current market to see how long homes are staying on the market to let you know how fast your house could sell and how fast you may have to purchase a new place. Depending on the market conditions, it may be better to buy first and sell later or sell your home now and wait to purchase your next one.
What is a Buyer’s Market?
A buyer’s market is a condition where there are more homes for sale than potential buyers. Finding a new home will be relatively easy in such a market, but selling your current home may take longer. In this situation, sellers may be willing to accept a contingent offer, meaning that you agree to buy their home, provided you can sell yours first.
What is a Seller’s Market?
A seller’s market is a condition where there are more potential buyers than homes available for sale. In such a market, your current home will likely sell faster than you can find a new one. If you are in this situation, consider asking your buyers for a rent-back agreement to allow you more time to find your new home.
Here are some tips on what to do depending on the type of market you are in:
- Buyer’s Market: Make an offer with a sale contingency or request an extended closing.
- Seller’s Market: Make an offer with a settlement contingency or request a rent-back agreement.
Timing is Everything
When buying and selling a house at the same time, timing is essential. You need to ensure you have enough time to sell your current home before closing on your new one. This can be tricky, as you do not want to wait too long and risk passing the opportunity for your next home to another buyer.
Financing Can Be Complicated
Financing a home purchase is complicated enough on its own, but when you’re buying and selling a house at the same time, things can get complex. You may need to qualify for a bridge loan or other special financing to cover the gap between selling your current home and purchasing your new one. Your real estate agent can connect you with a mortgage lender to help you explore all your financing options and ensure you get the best deal possible.
Contingencies are Key
When buying and selling a house at the same time, contingencies are key. When you go into escrow on your new home, you set a contingency that you need to sell your home first before you can close on your new one. You can also set sale contingencies to cover you in case you cannot sell your current home. Worst-case scenario, you walk away from your new purchase, so you are not left with two mortgage payments.
Negotiation Skills are Essential
Negotiation skills are essential when buying and selling a house at the same time. You’ll want to ensure you’re getting the best possible price for your current home while negotiating the best possible deal on your new one. This can be a delicate balancing act, but working with an experienced Realtor can help you negotiate the best terms on both transactions.
Communication is Critical
When buying or selling a house at the same time, communication is critical. You will need to keep all parties involved in both transactions informed of any updates or changes and ensure everyone is on the same page. This can be challenging. Especially if you’re working with multiple real estate agents or lenders, good communication can help ensure a smooth transaction from one home to the next.
In conclusion, buying and selling a house at the same time can be a challenging process, but with the right preparation and guidance, it’s possible to make a smooth transition from one home to the next. Offercity is a great option for homeowners looking to sell their homes quickly and for the best price. You don’t have to worry about decluttering, making costly repairs, home inspections, or paying fees or commissions. We work on your behalf by marketing homes directly to local investors. Investors bid on these homes, guaranteeing the best possible as-is cash offer for the seller. Contact us to get started.