How to Buy and Sell a House at the Same Time
Moving out of one home and into another is a major life change! As you pack up your memories from one house, you’re able to look forward to the memories to come in another. While this situation is surely exciting, it can also raise many questions regarding the timing, finances and support necessary to transition from one home to the other. Many of my clients come to my office with the same dilemma – how do I buy and sell a house at the same time?
Though the answer is different for everyone and depends on your unique financial situation, there are a few things every homebuyer should keep in mind as they transition out of one home and into another.
Get Pre-Approved
First thing’s first – as a seller, you also need to get pre-approved for a mortgage as a buyer. A pre-approval from a reputable lender is extremely important and preferred by real estate agents. When your agent sees that you have a pre-approval from Ross, they can be sure you’re a serious buyer with support from a strong lending team. As with any pre-approval, your lender will want to look at your income and assets during this process.
Once your lender understands what price point you want to be in, they can review your options with you and can come up with a strategy tailored to your wants and needs. That way, when you’re ready to write an offer, you can be confident it will get accepted – and it may not have to be contingent upon the sale and closing of your current home. Knowing all of your financial options early will help you prepare for worst-case and best-case scenarios.
Work with a Reliable Realtor
Working with an experienced real estate agent will make a world of difference when it comes to buying and selling a home, so finding the right agent is crucial. Your real estate agent can help walk you through the home buying and selling process, as well as price your current home properly so you know what your house is likely to list and sell for. That way, you can accurately estimate your net proceeds and budget wisely for your new home.
Real estate agents are also there to answer any questions you have! As a seller, you probably already know about the hidden costs of buying a home, but what about hidden costs when it comes to selling? Your agent will be able to explain a number of costs you need to consider, including commission, transfer taxes, owner’s title policies and the impact of seller’s concessions. As a seller, multiple offer situations can be challenging, especially in a seller’s market, but your trusted real estate agent will be able to help you navigate appraisals, bidding wars and more.
Know Your Market
As I mentioned above, it’s currently a seller’s market, which means homes that are priced right and in good condition are going to sell fast! As a buyer, you need to make sure your offer is going to be attractive for the seller. It’s not just based on the price of the home. A prospective seller of a property is going to look at your offer for multiple strengths, including who you’re using for a pre-approval, contingency upon the closing of a home, how quickly you want to close and how much you’re putting down. Make sure you’re working with an experienced lender to ensure your offer is just what the seller is looking for!
Know Your Options
Most sellers are afraid of not being able to find the house they want to live in. Recently, we’ve seen many sellers buy a house, or find the house they want to buy, first and then put their existing home on the market. In years past, buyers would put their house up for sale, get it pending, and then go out and buy a new house.
Often times, a client will come to us and say, “I just found this house, can I qualify to buy it before I sell my existing home?” Many buyers who are also sellers don’t think this is something that can be accomplished. However, it absolutely can! After you get you pre-qualified and into contract on your new home, you can work with your agent to quickly list your current home. Because we’re in a seller’s market, you should be able to close both homes around the same time.
Know Your Timeline
Communication between all parties is key. Try to work with your lender and your real estate agent throughout the entire process to ensure there’s a smooth transaction. Discussing timelines, dates and occupancy needs with your agent before listing the home is necessary in these kinds of situations. And if you’d like to have your closings happen at the same time, have your real estate agent and lender contact each other to coordinate. Simultaneous closings are also an option, but it takes a great team to make them happen!
Additionally, sometimes transactions don’t happen as smoothly as planned because of something or someone up the chain. Know that if one person isn’t ready to move forward, your timeline may shift. While this is possible and can be stressful at times, your agent and loan officer are ready to help and work with you to make the transaction happen as soon as possible.
Consider Contingencies
If the offer on your new home is dependent upon the sale of your current home, there are a few things you need to keep in mind. As a buyer, you want to make your offer as attractive as possible to the seller. If it’s contingent upon the sale of your home, that can make it challenging in the current market. A prudent buyer is going to want to try to eliminate that contingency, if at all possible, knowing that the prospective house will sell quickly.
If you’re building a new construction home, make sure you take into account the 6-12 months it will take to build your new place. Do you know where you’ll be living as you wait for your home to be built? This is another situation where if you can afford to get the house under contract without it being contingent upon the closing of your current home, it may be to your benefit. While it is scary to buy a house without selling your existing home in fear of taking on two mortgages, our lenders will guide you through the process to put you in a position where making double house payments is not an issue.
Whether you’re a buyer, a seller, or both, Ross Mortgage can provide you with first-class advice and the best options possible. Send us a message! We’d be happy to put you in touch with an experienced member of our lending team who can walk you through your options.
