Buying or selling a home can be a difficult process by itself. Doing both at once requires your real estate agent to be a certified tightrope walker. Even so, people do it all the time. While everyone’s situation is different, we have plenty of tips and tricks to advise you on how to buy a home and sell one simultaneously.
In this article, we will discuss:
Remember our first-time home buyer’s guide? Many of the earlier steps, such as figuring out your finances and how the home buying process works, definitely come in handy here. Think of your first-time home buying experience as a beginner’s guide, and the simultaneous buy-and-sell as a course on professional home ownership.
Let’s get started!
How to Buy a Home: The Market
Since you’re both selling and buying a home, the first thing you need to do is research the market. Currently, the market is crazy. Here’s a quick refresher of Seattle’s real estate market today:
Like we said - crazy.
If you’re just looking to sell your home, this would be great news. Unfortunately, pulling off a simultaneous buy and sell is challenging whenever the housing market swings heavily in one direction. You can probably sell your home pretty easily, but finding and buying one that you really like may be another story.
Still, it can be done - and you will be coming to the table with one key advantage: if someone is willing to bid $100k above asking for your home, that’s $100k extra that you will have to bid on your next home.
Ideally, you want to have concurrent closings: where you sell your old home and buy your next one on the same day - or at least the same week. Things don’t always work out that way. If you’re not prepared, you could find yourself:
To avoid these scenarios, we recommend going with one of the following options. You can:
All three of these options have their pros and cons:
When considering your finances, you should know:
In a Seller’s Market...
Since we’re in a seller’s market, you need to make sure that your home is market-ready. You must have your finances together as well, in case you have to make a buying offer quickly.
Because sellers have the advantage, it’s less likely that you’ll be able add contingencies or push the closing date. However, you can be more selective about which offers you want to consider, and if your current home is market-ready and priced well, it should sell faster.
In a Buyer’s Market...
A buyer’s market is usually less stressful for simultaneous buyers and sellers. It may take longer to sell your homes, since there’s more supply than demand. You should consider waiting until you’ve gone into contract with a buyer before making an offer on your next home. You will also have the option to include a sales contingency in case the contract with your current home’s buyer falls through.
Buying Before Selling
While you’re learning about how to buy a home, you may decide that it’s less stressful to buy before selling. The downside is that it’s expensive. Between the time that you’ve bought your new home and still own your current one, you’re paying two mortgages.
Since it’s a crazy seller’s market, you can attempt to buy a new home and roll the dice, hoping that your current one will sell quickly. If you’re staging your home properly and are financially prepared, this is a risky option with the potential for a huge pay off.
Another option is to consider a sales contingency, a bridge loan, or a home equity loan. If you’ve done your research, you’ll know which is best for you.
A third option is to not sell right away. Simultaneously buying and selling is stressful. Why not consider renting your home out instead, and then review your options at a later date? Renting comes with many advantages, such as depreciation and appreciation.
Selling Before Buying
If you’re risk averse and don’t want excess stress, then selling before buying is your best option. You can literally avoid everything discussed above by simply selling your home, renting for a little while, then buying a new home.
However, selling before buying isn’t risk-free. If your home sells quickly, you could find yourself temporarily homeless until you rent elsewhere. To avoid this, you can ask the buyer to extend the closing period to give you more time to find a new dwelling. You can also ask for a rent-back clause, where you pay the new owner’s rent for a short period of time until you move.
Final Thoughts on How to Buy a Home and Sell Simultaneously
When you can pull a simultaneous buy and sell, it’s great! However, it’s not always your best option. There’s nothing wrong with buying before selling, or vice versa.
Whether you’re looking to do both, or simply just buy or sell, we’re here to help you every step of the way.
By Anthony Greer
Anthony Greer specializes in content writing and brand messaging development for service-based businesses. www.anthony-greer.com