Factors to Consider When Buying and Selling a House at the Same Time
Is it possible to buy and sell a house at the same time? Both real estate transactions are stressful on their own, but buying a new home and selling your old home simultaneously adds another degree of difficulty. It is possible to do both successfully and simultaneously, but you will have to be diligent when you work through the process. If you are confident your home will sell quickly, you may want to buy a new home before selling the old one, but you may struggle to find a down payment. If you sell your home quickly, you may find yourself scrambling to buy a new one in a seller’s market. Your agent can help guide you through the process and lay out all your options.
Buying a New Home Before Selling
In most cases, homeowners sell their old homes first so they have the proceeds from the sale to buy their new home. If you are carrying one mortgage already, it may be difficult to qualify for a new mortgage, and without proof of financing, you may not be as attractive when buying a new home. You run a good chance of having two mortgages to pay at once. However, there are ways to get around this. Some buyers use equity from their current home or a cash out refinance as a down payment, some use their 401(k), some get a gift, and some use a sale-leaseback contingency.
This may sound complicated, but buying a new home before selling means that you will not be caught without somewhere to live if you can’t find the right new home before your old home closes. You will also know how much you need to sell your old home for. Before you pursue this strategy, speak with your lender about how you will navigate the financial piece of this process.
Selling a Home Before Buying
There are many advantages of selling your home before buying. You won’t run the risk of having two mortgages to pay. You will know exactly what your budget is for the new home and you will know that you can get the financing done easily. You’ll be able to make an offer on a new home without any contingencies on selling your home first, making you a more attractive buyer.
While there are financial advantages to selling your home before buying a new home, there are drawbacks as well. In a seller’s market, you may struggle to find the right home and could be without a home for longer than you expected. This means you will have storage costs, increased moving costs, and may need to pay for an interim living space.
Understanding the Market and How to Sell a Home Fast
The first step to buying a new home and selling your home at the same time is understanding the market. Is it a buyer’s market? A seller’s market? Somewhere in between? If it’s a seller’s market, it may make more sense to find a new home first and trust that your home will sell quickly. In a buyer’s market, making sure you have a good faith offer on your home before looking for your new home is a smarter choice. In both markets, you will want to know how to sell a home fast, and that’s where you will look to the experience and expertise of your agent.
Your agent has guided many buyers and sellers through the process of moving from one home to another and will understand how to sell a home fast. They know the market and can advise you accordingly. If you are looking to sell and buy at the same time, speak to your agent and lender about the best strategy for you. We are experts in local real estate and can help you buy or sell your home successfully. Contact Amberwood Real Estate to learn more.