Perhaps you’re thinking about relocating to southwest Florida, but you have another home in a different location that you need to sell first. Maybe you’ve decided that it’s time to upgrade, and you’re wondering how to best time out the sale of your current home and the purchase of a new home. While buying and selling simultaneously presents a unique set of challenges, there are some tips and tricks that you can implement to make the process more manageable. Keep reading to learn about how you can sell and buy a house at the same time.
1. Determine if you can
Ideally, you can time out your transactions so that you don’t carry multiple mortgages at the same time. However, there’s always a chance that you have to carry both mortgages at the same time. Your lender can assess your situation and tell you if this is a possibility for you. The main factor here is how long you can afford to make both payments before it becomes a financial burden. In most cases, this depends on how much cash you have saved.
For this reason, and because you’ll need cash to make a down payment on a new home, make sure you have plenty of cash on hand before you look to buy and sell at the same time. Another option is to look into a Bridge loan. Bridge loans aren’t used as often as they once were, but they are sometimes an effective tool if you’re hoping to bridge the gap between the time your current home sells and when you purchase a new home. This loan gives you extra cash that you can use to close on a home purchase even if you haven’t sold your existing home yet.
For this reason, and because you’ll need cash to make a down payment on a new home, make sure you have plenty of cash on hand before you look to buy and sell at the same time. Another option is to look into a Bridge loan. Bridge loans aren’t used as often as they once were, but they are sometimes an effective tool if you’re hoping to bridge the gap between the time your current home sells and when you purchase a new home. This loan gives you extra cash that you can use to close on a home purchase even if you haven’t sold your existing home yet.
2. Prepare for both transactions
As you would do for any home purchase, start by speaking with your lender about what you can afford. An individual lender can give you the best estimates about what kind of loan you can qualify for based on your current debt-to-income ratio and your current cash flow situation. Get a pre-approval letter, and you’ll be even further ahead in the process. The party who sells you your next home may want to see this letter before they sign the deal, so it’s wise to have it ready ahead of time.
For the home that you’re selling, take time to do a few upgrades and begin clearing some clutter. Think about how to effectively market your home once it goes on the market so you can garner significant attention and sell the home quickly. Begin to do some research about where the market in your area currently stands, and use this information to determine the amount at which you’ll price your home. The Waterfront Lifestyle Group can help you develop your online presence and price your home in the sweet spot.
3. Design your ideal timeline
As the old adage goes, the best way to eat an elephant is one bite at a time. While it may feel overwhelming to think about buying and selling simultaneously, when you break the process down into smaller chunks, it becomes easier to wrap your head around how you can accomplish both goals. Since you’re most responsible for your current home, begin by getting that property ready to sell. After you feel like your home is ready to go on the market when the time is right, start looking for a new home to purchase. Once you have a contract to buy, you can list your current home and express a desire to close by a certain date. If you’re lucky, you can close on the sale in the morning, with the moving truck fully packed, and begin unloading into your new home after closing on your purchase later in the same day. This makes for a long and exhausting day - but there is zero overlap in your living situation.
4. Have contingency plans in place
For most people, the ideal timeline sounds like an impossible fantasy. While the process can play out this way, it’s not realistic in every situation. You’ll want to have contingency plans in place, both for the financial side of things as well as the practical issue of where you’ll live if you sell your current home before you buy a new one. If the closings are only a couple of days away, you can stay in a hotel. If the interim period is much longer, you may need to make other plans. In some cases, the party who is buying your current home may agree to a rent-back deal in the contract that allows you to occupy the space for as many as sixty days after closing. Another possibility is that you write a seller’s contingency into the contract for your current home. This allows you, as the seller, to terminate the contract if you’re unable to find a buyer for your home during a specified amount of time. This is risky for the buyer since they have no control over whether or not your home sells. In order to incentivize the buyer to include this clause in the deal, you may have to agree to a lower sales price on the home or another non-financial incentive that sweetens the deal for the buyer.
5. Work with an experienced realtor
The best way to handle multiple transactions at one time is to entrust both deals to a realtor that you trust. If you need help handling an upcoming sale or purchase, the Waterfront Lifestyle Group is standing by. Their knowledge and passion for waterfront living in southwest Florida are unmatched, and they will use their skill set and market expertise to help you make the best possible decisions when buying or selling a home. They are looking forward to getting to know you and partnering with you throughout the entire process.
*Header photo courtesy of Waterfront Lifestyle Group
