Buying and selling your home is a huge endeavor.
The paperwork, deadlines, and research can all be a little stressful. Couple it with selling a home at the same time, and it can turn into one big, overwhelming process. But, paired with the right Realtor, it doesn’t need to be stressful at all. In fact, Jacki and Kristi are here to make the process a smooth and enjoyable one for you.
Here are a few things to keep in mind when you're buying and selling a home simultaneously:
· You can purchase your new home and sell your old home the exact same day.
· Do remember that you're at the mercy of the real estate market from both sides of the transaction instead of just one.
· It takes a little more juggling, and often a little more paperwork and patience closing two transactions.
· Your Realtor should be experienced in offer negotiation and scheduling back to back closings.
The biggest pro to selling your home prior to purchasing is that you know how much money you have to work with and can qualify for the next mortgage more easily. During the listing and selling process, Jacki and Kristi can provide you with a Net to Seller worksheet that will give you a good estimate of how much money you will earn, or have to bring to the table, at closing. Most of our clients need to sell their home prior to buying their next property so it’s a necessity, and not an option, for them.
The biggest risk of selling prior to purchasing is that you could sell your home without having anything lined up to purchase and move into. If this happens, you may have to rent while you look for a new home or keep some belongings in storage.
The biggest pro to buying a home before you sell your old one, is that you will have plenty of time to move. This gives you more time to get your home ready to sell and ease into the process.
The biggest risk is, of course, if your home doesn't sell for a while, you could possibly be paying two mortgages at once. If your home is already paid off, that's not a big deal, but most of us would struggle with two mortgage payments. Plus, it's harder to qualify for a new mortgage if you have two mortgage payments. To buy a house before you sell, your income will have to support both mortgage payments at the same time.
Add a Contract Contingency – Your Realtor Will Have the Proper Forms
You can also align the closing dates of both your purchase and your sell by asking to add a contingency to your contract, whether you're buying or selling. If buying, you can ask the seller to make your purchase contingent upon the sale of your current home. Although few buyers will agree to an open-ended period, some will be so eager to buy your house that they'll agree to delay the closing until you close on a new house or until a certain number of days pass, whichever comes first.
If selling, you might negotiate with your house's buyer instead. Ask to add a contingency to the contract that makes the closing date line up with the closing date on a new home. Another option is a rent-back arrangement. With a rent-back, the buyer agrees to "rent" out your current home for a short time after you sell it. You negotiate a rental amount you will pay the buyer in exchange for staying in the home you just sold to them for a predetermined amount of time.
Do keep in mind that not all lenders allow a rent back or only allow it for a short period of time. But it's more convenient than selling your home, moving into a rental property, and then moving again into your new home. Whatever your unique specifics may be, if you need to buy and sell or sell and buy, Jacki and Kristi have the experience to help make the process a pleasant one for you. If you have questions about your needs – talk to us!
Typical Client Sell and Purchase Timeline:
1. Select a Realtor to Represent You as a Buyer and as a Seller
2. Find Out What you Owe on Your Current Property
3. Have Your Realtor Inform You How Much Your Property is Worth and What You Can Expect to Net at Closing
4. Contact a Lender, Get Prequalified For Your Next Purchase and Decide How Much You Want to Spend on Your Next Home
5. Go Look at Properties Within Your Price Range for Possible Purchase and Properties that Compete Against Your Home For Sale
6. List Your Home
7. Go House Shopping and Place an Offer on a Home You Want to Buy
8. Negotiate Offers and Go Under Contract – Both Buying and Selling Side
9. Go Through Inspections, appraisals and loan contingencies
10. Close on Both Homes the Same Day
Source: Buying and Selling Your Home
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