Tips for Buying and Selling a Home at the Same Time
There are many things to consider when buying a new home and selling your current home. It certainly pays off to have a good strategy in place, and hopefully receive a bit of luck!
Most people have three main goals when moving home:
to get as big a price as possible for their current house
to buy a new house as cheaply as possible
get through the process with as little pain as possible
Find a Realtor that knows the market first
Finding a Good Real Estate Agent
Step one find a qualified, experienced full time Realtor not just a real estate agent. This person will represent you as both a seller and buyer, which means that he or she will work with two other agents and negotiate contracts. When dealing with two properties, it’s important that everyone stays on top of deadlines. Using a single agent to do this really cuts down on confusion and time deadline problems. Using a Realtor with the Certified Residential Specialist (CRS) is one more level of excellence. To go even higher look for the Master Certified Negotiation Expert Designation (MCNE). There are less than two dozen of these in the State of Utah. Well worth the find!
When you find the right house, part of your agent’s job is to write up an offer. Talk to your agent ahead of time about how you will handle this process. If you are putting in an offer on a house and your house is not sold, you have some options:
Put in a contingency clause that states that the contract is dependent on your home selling. Or place the offer contingent on getting financing. The other Realtor may ask for a notice or time clause. This lets the other seller keep the property active on the market subject to your offer. The catch is when another offer comes in you can get the boot with a 48 to 72 hour notice to remove your subject to. Or you can remove your subject to and show proof that you can carry two mortgages if your home doesn’t sell immediately.
Timing is Good Planning and a little Luck
Quite frankly the best option is waiting till you have an offer on your home before attempting to buy another. We have managed many times to find the perfect home, place an offer and arrange closing the same day your old home closes! It doesn’t always happen so you need to have a backup plan. In this scenario, you would need to find a temporary place to live until you close on a new property.
Finance Options Available to Buy and Sell
Having a great lender will help you with a smooth transition as you look for a new home. Have your Realtor keep you lender up-to-date on your status. Make sure you stay in contact with your lender, get prequalified or preapproved. Find out if you have any conditions to meet for your new loan. Having most of you loan approval conditions me ahead of time will greatly help, especially if you have time issues.
One option you might want to try is qualifying for a new loan while carrying your original loan. This requires that you have sufficient income to cover both mortgages and still be within approved limits. If this is the case, it won’t matter to the lender if your first home sells before closing on the second one.
The second option is to qualify based on a “pending sale” status. Your current mortgage would not be included; only the new one would be used to determine how much you can borrow. This will mean that you can be approved for a higher amount, but only if you sell your current home. With this option, your loan will not fund until you close on your current home and the mortgage is paid in full.
Although challenging, simultaneous buying and selling happens frequently. We navigate this path frequently. We are experienced in dealing with the timelines and requirements of this scenario. Knowing the ins and outs of selling and buying we can provide the right experience to guide you through the process, shorten the transition timeline and make a smooth move to your new home.
Don’t let fear run your decisions when selling or buying
So if your home has sold but you haven’t found a new place to live, don’t freak out and let stress and anxiety push you toward a bad decision. Always have that Plan B in place. We recommend arranging for a short-term rental if the situation arises. This although more expensive and inconvenient is a plan to have just in case. The other outcome might be you becoming stressed or pushed into something that you would not normally do or be interested in. It is never a good thing when you make a purchase because you might be pressured from the time constraints
Found the perfect home right on schedule? That’s great. But don’t feel like you have to compromise on things that are important to you just because you need to find a home. Conversely, don’t accept a bid that you feel is too low just because your finances are strained by two mortgages. If you have a temporary apartment set up, you’re less likely to compromise.
Certainly, selling and buying a house simultaneously will be stressful, but carefully considering and planning for the risks and hurdles can mitigate the stress.
For those who decide to sell first, it’s business as usual. Here are two options to think about.
First, renting short term between the sale of your existing home and the purchse and closing of your new home.
Second, negotiate a rent back of the home you are selling. It is possible and we have done this on several occasions. Negotiate a 30,60,90 term that you can rent back the property while you wait for your new home to close. We find that a 60 day rent back is the most common. It doesn’t always happen due to the buyers circumstances. This negotiation needs to happen first thing as soon as an offer comes in.
You Can Do This!
Years from now, when you’re sitting comfortably in your new home in that perfect neighborhood, you’ll probably look back on this experience and laugh! Ohh the stories you can tell your new friends and neighbors.