Time for a Change? How to Buy and Sell a House at Once

Fall is a season full of changes: leaf colors are changing; temperatures are changing; and, even seasonal sports and restaurant menus are changing. Amid all of these autumn-inspired changes, many homeowners may be considering a little change, too.

No, we’re not talking about changing the throw pillows, applying a new coat of paint here and there or another type of home renovation project. We’re talking about selling one home and buying another!

Just like the spirit of the upcoming Halloween holiday, buying and selling a home in any real estate market can be more than a little “tricky.” But, there also are some tricks-of-the-trade that can make things a little more of a treat for the homeowner who is ready tackle both tasks at once. 

1. First of all, when it comes to buying and selling a home simultaneously, planning is paramount. There are a few scenarios that can arise, either by design or by accident:

Selling a home first, then buying a new one: While this may sound ideal and it is the safe way when it comes to your finances, selling one home and buying another can make for some interesting temporary living arrangements. If you sell your home, then begin looking for another, you may need to live with family or friends temporarily, rent temporary housing or strike a rent-back deal with your home buyers. But, with no pressure to move right away, you will be less likely to drop the price of the home that you’re trying to sell. Plus, you’ll know exactly what you can spend on a new home.

Buying a new home first, then selling a current home: This option is great for the move-up buyer who already has paid off their current home or for the seller who plans to rent their current home for a while, rather than sell it right away. The perks of buying one home before you sell another include less of a disruption to your life, a less stressful move-in process and plenty of time to prepare your current home for sale. Some negative aspects to this option could include carrying two mortgages, maintaining a vacant home or taking on landlord responsibilities that you may not be prepared for.

Buying and selling a home simultaneously: Many move-up buyers prefer this option, though it can be the trickiest! When you’re trying to sell one home and buy another at once, you often must prepare for contingencies on both ends. Some seller/buyers also take out home equity lines of credit to cover the down payment on their new home. But, they pay that credit off once they sell their old home. With this option, timing can be everything.

After reviewing just three scenarios that can arise when selling one home and buying another, it should go without saying that the process can be stressful, if not a little scary! Knowing what to expect at the beginning is a great way to help minimize or eliminate stress. It is also important for everyone involved in the buying and selling process to remember that even when it seems like it is taking forever, the process and stress are temporary!

1. Mortgage pre-approval is also an important aspect of the home selling and buying process. If it is at all possible, have a trusted, reliable lender prepare a loan pre-approval for you, as if your current home has already sold. Without that financial burden, your debt-to-income ratio will be lower and you will be able to more accurately forecast how much new home you can afford to buy.

2. Contingencies also often come into play when a homeowner is trying to sell one home and buy another. They are designed to help a seller/buyer not become stuck with two mortgages and they can work in just that way. However, they also may detract potential sellers from accepting an offer; so, it is often good to set release dates with contingencies. By removing a contingency after a few weeks, a buyer who is also trying to sell their home stands less of a chance of losing out on a new home that they love.

3. A little market know-how can go a long way when someone is trying to sell and buy a home at the same time. A good grasp on the real estate market where they are planning to sell and buy allows a homeowner to gauge how long it may take to sell their current home and how much they may be able to afford in a new home. Of course, gaining that market knowledge can include a time-consuming, research process – and that’s before you even place your current home on the market or begin to search for a new home!

4. Finally, if you haven’t already guessed, it is a great idea to enlist the help of a trusted real estate agent when you are trying to buy and sell a home simultaneously. Let your real estate agent do the market research, negotiating and even home searching for you! If you’re ready to sell your home and buy another, get started by contacting a trusted Berkshire Hathaway HomeServices The Preferred Realty agent today.