Managing The Process of Buying and Selling a Home at Same Time

Written by Posted On Thursday, 21 February 2019 14:36
Buying and Selling a House Simultaneously Buying and Selling a House Simultaneously

What Should Come First Buying a New House or Selling The One I Own?

Being financially stable allows you to buy a home without selling your current home first. If your finances could use some work, it's likely you will have to sell your home before you can buy another one. Most people are in fact not able to buy a second home without selling the one they already own. It's a luxury to be able to do that.

Buying and selling a home simultaneously can be very tricky! Given this you're going to need to follow some specific tips for buying and selling a house at the same time.

By following these tips you'll be able to better manage your stress levels throughout the entire process. You'll also gain a very important understanding of how to achieve your goals while buying and selling in the same time frame.

If you are in the enviably position of not needing to sell your current home in order to buy, you have more options than the average Joe. What you will want to do is decide which way to proceed.

Do you buy a second home first or go the traditional route and sell first. In either case, you will want to get a pre-approval letter from a reputable lender. Make sure the pre-approval specifically states you do not need to sell any real estate to make a purchase.

The Buyers and Sellers Market

When you're buying and selling a home at the same time, you're in both the buyer's and seller's market. How do they differ? In a buyers market, there are many homes available but not enough buyers.

It is the opposite of a seller's market. In the seller's market, there are a lot more buyers than there are homes available to meet the demand for home buyers. When you are selling a home it's fantastic. As a buyer looking to find a home - not so much!

1. Understand Your Finances-  When you have an understanding of your finances, you know how much house you can afford. Talk to your financial planner and to get the specifics of your financial situation. Before picking a lender, you should have a clear understanding of your finances and work on any weaknesses. Check your credit report and make sure there are no mistakes. You would not believe how often people find issues with their credit reports.

2. How Much Equity Is Available? - Can you afford to purchase a home without worrying about the equity of the home you're selling? Keep in mind the equity you have in your home will not be available until the sale of your home closes. Equity is the remaining amount of money available once you calculate your home's current market value minus the remaining balance of your mortgage.

3. What Is the Resale Value of Your Home? - When you're conducting research, you need to find out what your home is worth in the current market. It's a good idea to get a pre-inspection to determine how much work your home needs and how much money it will cost.

Buying and Selling a Home At the Simultaneously

Let's assume for a moment you are one of the folks who cannot afford to carry two mortgages and need to sell your existing house. What should you do? Get you home listed for sale and try to get it sold as soon as you can. Once your home is under agreement far more people will take you seriously. The sellers of the properties you will be looking at are not going to take you seriously otherwise.

Unfortunately, lots of people are under the mistaken impression that they can make the purchase of another property subject to the sale of their existing home. Fat chance! Most people are going to reject a home sale contingency. Why? They lose complete control of the process. The owner of the home you want to buy has no idea if you will price your home correctly, hire a great real estate agent, etc. It is one big gamble. One that most people are not willing to take.

Selling Your House Contingent on Finding Another

Besides a home sale contingency, the other plan that people try to make is to make the sale of their existing home subject to finding another house. Folks, while this option may sound intriguing, it is DUMB!

You will be hard pressed to find a buyer that is going to give you unlimited time to find a property you like. How can they move on with their own life? What it they like other houses as well and will lose those options by being tied up in your sale.

In the article referenced above, you will see all the reasons why you should not go this route. You will make your home harder to sell and ultimately get less money unless you are really lucky!

The Option of Renting Back After Selling Your Home

Renting your home after selling it becomes an option if there are obstacles that delay you with moving into your new home. A rent-back, also known as a post-settlement occupancy agreement gives you time after the closing date to get yourself situated.

For example, if your new home is not ready for occupancy for whatever reason, and you have already sold your home, you can use the rent-back option to pay rent to the people who bought your home, so you have somewhere to live until your home is ready.

This option of course only works if the buyer purchasing your property has flexibility themselves. If they sold another home and need to be out then it probably will not be possible. If on the other hand they have been living with parents of other relatives then maybe they can extend their stay.

Requesting An Extended Closing

The standard closing date can last anywhere from 45 to 60 days. Requesting an extended closing date means you will have more time to sell your home and use the equity from the current home to buy your new home.

Requesting an extended closing is often successful in a buyer's market. When you are in a seller's market it will become more challenging. Just be sure you qualify to do this before writing up a real estate contract. Trying to buy a home before selling your existing house will end up being a real problem if you don't qualify. You could end up forfeiting large sums of earnest money. Not an enviable position to be in.

Embarking on this journey can be difficult, but not impossible. You need a real estate agent that will work for you and get the job done.

Additional Helpful Home Buying and Selling Resources

Use these additional resources to make smart decisions when you are going to be buying or selling a home. Sound research goes a long way to making the best decisions possible.

About the author: Bill Gassett is a nationally recognized Real Estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past thirty-two plus years. Bill has been one of the top RE/MAX Realtors in New England for the past decade.

In 2018 he was the #1 RE/MAX real estate agent in Massachusetts. His real estate advice has been featured on, CNBC, RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Bill covers real estate sales in the following Massachusetts communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

Reach out for his advice anytime.

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Bill Gassett

One of the top RE/MAX agents in New England over the last decade plus. Providing exceptional real estate services to buyers and sellers in the Metrowest Massachusetts area including the following communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

See my real estate website at Maximum Real Estate Exposure - one of the most visited real estate sites in Massachusetts.

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