In an ideal world, buying a home and selling one would both be leisurely affairs – far apart from one another, without the logistical complexities of overlapping transactions. However, for many real estate consumers, that’s not an option.
When most people move to a new home, they need to manage buying and selling simultaneously. And that means lots of pre-planning, plenty of strategic considerations, and loads of documents to sign. In this article, explore tips to streamline the process, mitigate risks and land in your new dream home with sanity intact.
1. Plan Strategies and Financing
Call this a grand, overarching tip: Plan as much as possible.
To start, plan your strategy for buying and selling. This strategy might include buying before selling, selling before buying, or – perhaps the most common way – tackling the two at the very same time.
Next, consider the financial implications of your chosen strategy. If you buy before selling, you will need to assess whether you can float two mortgages. If you sell before buying, you will need to line up a temporary place to live, pay for two moves, and contend with the consequences of being out of the market for a brief period. Lastly, suppose you are truly buying and selling simultaneously. In this case, you will strategize with your realtor about timelines, agreement conditions, and (potentially) bridge loans to cover the new down payment in the event that you close on a home before selling.
For the remainder of the article, let’s assume that you opt for the third option. In this case, you will craft a timeline and conditions that will help you facilitate a frictionless move.
2. Partner with the Best Realtors in Your Area
Buying and selling simultaneously is a high-wire act requiring know-how, experience, and precision. Therefore, it is imperative that you partner with the best realtors possible.
For best results, you will use this realtor in both transactions – so that one hand knows what the other is doing! You will need someone with intimate knowledge of the current market to tell you a) how long it may take to sell your home, b) a likely valuation for your sale, and c) what conditions you can get away with on your purchase while still remaining competitive. Further, they need their finger on the pulse of inventory, showing you several viable options so you can locate your dream home faster.
Research the best real estate companies in your area Ideally, engage a realtor the moment you decide to buy and sell – that way, they can provide expert counsel in the planning process.
3. Put Conditions/Contingencies to Work for You
Conditions (or contingencies, as they’re sometimes termed) will be the ace up your sleeve in a dual transaction.
Specifically, you want to include a “subject to sale” clause in your purchase agreement, which protects you in the event that your current home does not sell (therefore leaving you without the capital to make the new down payment). This is a standard condition in many buying/selling agreements and should set you up nicely for a smooth transaction. In these cases, it’s advisable to buy before selling, asking your realtor to push for a generous subject removal date.
However, if your area is a hot market (i.e., a seller’s market), these conditions might appear less competitive, giving prospective sellers no reason to choose your offer. In these markets, you may need to develop alternative approaches. Strategize with your realtor about the best course of action in your local market.
4. Close Your Purchase Before Your Sale
With a successful purchase offer in place, you will now start selling your home. When fielding offers from prospective buyers, ask your realtor to be strategic about the completion and possession dates.
Ideally, you want to complete your purchase before your sale. This timeline gives you a few days (or more) to move into your new home. As an example, consider that you’re due to complete your purchase on May 27th, gaining the new keys shortly after that; in this scenario, you might ask to complete your sale around May 31st, giving you roughly three or four days for the transition. In these few days, you can move, professionally clean your old home, and make any repairs/patches consistent with the selling agreement. It’s going to be a tough few days, but it will all be worth it when you’re in your new dream home!
Conclusion
As a parting caveat, please be aware that all transactions are unique. The advice above might be exactly what you need – but it might not. An internet article is no replacement for the professional advice of a great realtor. Connect with the best realtors in your area to develop a personalized buying-selling plan that’s relevant to your local market, your goals, and your timeline.
Buying and selling a home at the same time isn’t easy. But with enough preparation and the right representation, you can make it happen.
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