Buying one home while selling another can prove to be an extremely stressful undertaking. Sure, it's common to buy and sell homes at roughly the same time, but it’s rare for dual transactions that land on the same day.
To even ensure the purchase and sale happen within a few days or weeks of one another requires patience, flexibility, and a little luck.
But most of all, it requires planning and preparation. Let's take a look at four key factors for how to buy and sell simultaneously.
The type of real estate market you find yourself in often dictates the timing and ability to close transactions within days of each other. Low-supply, high-demand means a home that sells quickly. It also puts you in a hyper-competitive market when trying to buy.
The opposite is true when the market favors buyers—you'll have no problem finding a home to buy but may stumble a bit when selling yours.
Perform a deep dive into the market conditions for both transactions. Buying and selling in the same market will reveal subtle differences in your desired timelines. Transaction timelines across different sub-markets or even cities can prove even more dissimilar.
Can you afford a new house even without selling your current home? Are you in a financial position to act on a new home should the opportunity present itself?
Two big questions many homebuyers fail to ask themselves. The reason being they often underestimate the difficulty of closing two transactions within days of each other.
Many attempts to buy and sell simultaneously are stifled by the inability to act on a new home when the opportunity presents itself. Avoid this by seeking preapproval for a home loan.
It allows you to establish a buying strategy for what you can afford and frees you to make confident offers when the right home comes along. It also puts you at the front of the line for non-cash offers on a new home.
This one's pretty simple. If you hope to pull off dual transactions along roughly the same period, your current home must be ready to sell. The minute you realize a move is on the horizon, the process should begin.
Clean it. Declutter it. Depersonalize it and make any necessary repairs. Then hire a stager to help present the house in a more welcoming and less lived-in manner. The better the property shows, the faster it sells, and the sooner you can secure your next home.
Do you have alternate housing set up should your old home sell before you buy your new one? Can your finances carry dual mortgage payments a month or more?
Certainly, it's essential to go into every real estate transaction with a positive outlook. It's also wise to plan for contingencies. Prepare for when the timing doesn't work out the way you hope.
Consider seeking a short-term rental before the sales process. Or set up a few-week long, rent-back arrangement with your home's new buyers if you have delays closing on a new one.
If you run into issues selling, it can mean a worst-case scenario for moving on with your life in a new home. Nobody wants to pay two mortgages. For peace of mind, though, plan ahead for any financial roadblocks. Set aside up to six months of funds to cover your current mortgage should the sales process run into delays.
Finally, if you find yourself in a must-buy situation before selling your current home, it may be worth it to entertain a bridge loan or renting out the property. Both approaches come with plenty of risks, but they provide you more flexibility when navigating the buy-sell scenario.
Ready to sell your current home or in the market to buy and make your next major move? Contact Prema Subramaniam today and let her be your guide to East Bay luxury homes in Danville, Dublin, and Fremont, California.