Ahhhh, to be a first time home buyer again, and only having to worry about buying a home. Now as a move up buyer or a downsizer now you need to worry about selling and buying a home at the same time. It certainly can be stressful to balance the two simultaneous real estate transactions.
When you are selling and buying a home at the same time there is certainly a balancing act to be achieved. Ideally it would be perfect to sell your home and move into your new home on the same day.
But, sometimes that is easier said then done.
The First Step Is to Understand Your Market
When the thought enters your head to sell your home and buy a new one, don’t go off half cocked and just list your home. Contact an agent so first so you understand the delicate balancing act of selling your home and buying a home at the same time and what options you have available to do so.
For many you still need to finance your home purchase. Contact a lender for a pre-approval so you can start discussing real scenarios and real numbers. Make sure your pre-approval states whether it is necessary or not to sell your current home to be able to purchase a new one.
You should also take some time to make sure that your expectations are realistic. Moving up or down is different than buying your first home. You already have a house you like, you are just improving on some of the deficiencies in your current home. Make sure what you are trying to accomplish is attainable.
Occasionally, I will have a move up buyer contact me with only a small bump in house price but they are trying to move to a more desirable community or drastically increase living space or amenities. There goals may not be attainable.
What Are Your Options When Selling and Buying a Home at the Same Time
When you are selling and buying a home at the same time there is certainly a balancing act to be achieved. Of course everybody would love to sell their home and move into a new one on the same day. Here are some options to consider if you are looking to simultaneously buy and sell a home.
Finance Both Homes
For very few carrying two mortgages can certainly provide the easiest route to buy and sell at the same time. This allows you to find your home and close on it, then, sell your home after you have secured new housing. Of course this means you need to qualify for your new mortgage while carrying the mortgage on your previous home.
You may also need the cash in your old house for the down payment on your new home. Maybe you have enough equity and enough credit to get a home equity line of credit for you to tap into your current homes equity. While this is the easiest option it is probably not a reality for many homeowners.
Pros– least stressfull, timing is completely on your terms. Free to negotiate the best terms on the sale and purchase. Cons– you need to qualify for a new mortgage while carrying a second. Your money may be tied up in your current home.
Selling and buying a home simultaneously can be done with real estate contingencies written into both contracts. The first when you list your home it will be listed subject to finding suitable housing. When you put a home under agreement it will be contingent on selling your current home. If the contingencies don”t fall into place you are not obligated to buy or sell with no recourse to you.
For many who are looking to buy and sell at the same time this is an attractive option and many will try to go this route. There is a down side to using real estate contingencies.
First realize a contingency will often cost you money. Why is that?
For a buyer or seller to consider a contingency you may have to sell your house for a little bit less and offer more on the house you are wanting to buy. Basically your are asking the other party to wait for things to fall together for you with out any guarantee. Remember while the contingency may be the best option for you there are plenty of seller and/or buyers that do not need contingencies.
The second point to consider is some buyers and sellers don’t want to get involved with a contingency at all. This limits your pool of potential buyers for your home or homes that are available to buy.
Pros- may allow you to sell and buy the same day, lessens financial risk and stress Cons- lessens your buying pool and homes that may be available to purchase, the balancing act it self of closing on the same day can be stressful
Sell and Find Alternative Living Arrangements for The Interim
Another option that is available is to get your home sold first and have alternative living arrangements available for an interim period while you look for and get a home under agreement. This certainly reduces the stress of getting your home sold and buying a new one on the same day.
Living arrangements can be a family member, short term rental or a residence hotel. Remember if you are motivated to buy it will only be temporary. Several months at best.
This option will allow you to negotiate the best deals on the sale of your home and the purchase of a new home. The downside is you will most likely have to pay a mover twice and possible storage of most of your items while you search for a new home.
Pro’s- less stress, allows you to maximize profits from sale and purchase Con’s your probably paying for two moves, have to live in transition for a period of time, have to pay to store your belongings
Final Thought on Selling and Buying a Home at the Same Time
Of course it can be stressful, especially when children and pets are involved. But homeowners do it everyday and as real estate agents we are adept in walking our clients through the process. Just go into it prepared of what is ahead of you.
When you are buying and selling simultaneously, it is probably wise to have a plan A and a plan B. There are so many moving parts and variables it is wise to have a back up option.
Other Real Estate Resources
- Bill Gassett- How to Handle A Home Purchase and Home Sale Simultaneously
- Paul Sian- Comprehensive Guide to Buying or Selling a Home
- Anita Clark- 5 Negotiating Mistakes Home Sellers Make
- Lynn Pineda How to Buy A Home In a Sellers Market
- Conor MacEvilly- Buying and Selling a Home While Staying Sane
Selling and Buying a Home at the Same Time- Lessening the Stress is provided by Kevin Vitali of EXIT Group One Real Estate of Tewksbury MA. If you are thinking of buying or selling, Kevin is happy to answer any of your questions and can be reached at 978-360-0422 at anytime.
Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford