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Simplifying Buying and Selling A Home – at the same time
By Emilio DiSpirito, Realtor/Team Leader, DiSpirito Team with HomeSmart Professionals
Buying a home before selling your current home is not really an option for most. But, selling and buying a home at the same time with the right guidance is not as hard as you may think.
About 27% of Americans don’t make a move because they feel that this is impossible.
While you can’t control everything that happens during the complicated buying and selling process, there are some things you can do to set yourself up for smooth closings.
Choose a reputable real estate agent and prepare your home for the market.
An experienced local agent can help you determine the market value of your home, ensure you have support through the entire process from preparation to negotiation and staying on track when it comes to the local market.
Inspect. Stage. Price.
It helps to have a pro by your side. Buying a new home at the same time as you’re selling your old home is all about timing. Your agent is going to make sure that your home is priced competitively, for the condition, location and the amenities that it has. Then, they’re going to go ahead and work backwards from there to show you exactly what you’re going to walk away with.
Know the Numbers
Understand your financials before embarking on your buying and selling journey. Another important professional you’ll need is the right mortgage lender.Stay within your limits and take time to digest your financial situation – especially equity and loans you qualify for. Chose a lender that offers upfront underwriting. It’s a powerful tool that allows you a full mortgage approval only contingent upon appraisal. Sellers will favor this when you place offers or in the event you are in a multi offer situation when buying.
How much equity?
Simply put, the amount left over when you take the current market value of your home and deduct what’s remaining on your mortgage, transfer taxes, repairs, brokerage fees, etc. Also, consider if you’d be able to purchase without tapping into that equity. Remember, the equity you have in your home won’t be accessible until after the sale closes unless you’re able to pull out a line of equity, rent your home out and use that cash to cover the cost of your new home. (You may have several options!)
List Your Property
After you’ve found an agent, went through your financials, and have thoroughly discussed your options with your realtor – it’s time to put that house on the market!
Now you’re probably wondering… what’s next? Do I start looking for homes first? Do I wait to find the perfect home to buy then put my home on the market? Where will I go if I don’t find housing once I sell?
Put your seller hat on and imagine three separate offers coming in on your property, all contingent upon a successful sale of their home.
- Offer A has a home to sell, their home is listed on the market, priced appropriately and has several showings lined up.
- Offer B has their home pending.
- Offer C can have their home on the market within a few days or maybe a week.
I’m guessing you would go with offer B as your first choice, offer A as your second choice and C has no chance. Don’t be C.
Well, what if we find a buyer for our home before we find a place to live?
- We negotiate terms “subject to sellers finding suitable housing within (60,90,120) days.”
- If you can’t find a home you would like to purchase, we connect you with temporary housing.
- Check out this helpful video
To make sure your transaction goes according to plan, this is where the language of your agreements and communication with your real estate professionals is key. Your agent can help you comb through the offers and negotiate a contract that benefits you and your timeline.
What if we find a home to buy before our home is sold?
- We prepare a “hubbard clause” allowing you an agreed upon timeframe to get your home in pending. During this time period, sellers can market their home and allow you an agreed upon timeframe of usually 48 hours to either get your home in pending or come up with cash for your closing before they can accept a new offer.
Your agent will assist with presenting your offer in its best light. There is a very tactical way of doing this and this is where you will lean on your agents experience.
The Bottom Line
- List to Sell – make sure you don’t list for sale before your home is ready.
- Search to Buy – spend some time with your Realtor to discuss your desires, and get serious about finding where you are going to buy and what types of properties you are willing to make offers on. Be fully approved for a mortgage!
- Send and Receive Offers – structure your dates in the contract such that you have as limited risk as possible.
- Close – If both offers go through, you should be able to sell and buy very close together.
Why? Because you don’t want to risk carrying two mortgages, gives you more room for negotiation, and results in a higher selling price!
When you are trying to sell your home and buy another in a short period, the worst-case scenario is getting your home sold and then finding you don’t have anything suitable to purchase. It is normal to feel a little nervous about trying to juggle so many balls at once. In rare cases, your agent will assist you in finding temporary housing until you find that right home. Making sure you are fully prepared, financially, mentally, and even packing wise. It is important to listen to your real estate agent and don’t take shortcuts!
Emilio DiSpirito, Realtor/Team Leader, DiSpirito Team with HomeSmart Professionals. His website is www.DiSpiritoTeam.com