How to Buy and Sell a Home at the Same Time

Looking to sell your home this year and move into a new one ? Those are two massive tasks ! And while today ’ mho hot housing market might make selling your home easy, it could besides make buying one much more challenging—and potentially tangle you up in a fiscal fix .
Since no dream home is worth getting stick with two mortgages, it ’ south important to sell your current dwelling before buying a new one ( we ’ ll explain more behind the why late ). But for now, let ’ s go over how to buy and sell at the lapp time .
Don ’ thymine know where to start ? We ’ ve got you covered .

5 Steps for Buying and Selling at the Same Time

To feel convinced about tackling these two huge tasks in a close reversal, follow these steps :

1. Plan Your Schedule

first base, work with an experienced very estate of the realm agent who can help you understand the challenges and benefits of buying and selling a home in your current market. You and your agent can start with a discussion on current real estate of the realm trends. then you ’ ll have a grok on how much your home will sell for and how much you can expect to pay for your new home .

Find expert agents to help you buy your home .

With a clean understand of your veridical estate market and the professional advice of your agentive role, you ’ re ready to make a plan. Start by answering these questions with your real estate agent :

  • What’s my ideal timeline? At what point in my home-selling process should I begin looking for my new home? How long should I expect my home-buying process to take?
  • What’s my budget? Based on the expected sale of my home, how much can I afford to pay on my next house? How much of a down payment can I make? Can I pay in cash, or do I need to plan ahead for financing?
  • Can I make the transition at once? Or do I need to plan for a gap between closing on the sale of my current house and my move-in date for the new one?

2. Prepare Your Home for the Market

nowadays you ’ re quick to put your plan into action ! Keep in mind, your agent will help you with most of the tasks below to get your firm fix to list .
Hire a Home Inspector
Have a professional visit your home for anything that may need to be fixed before listing it on the commercialize. Better to find out what the issues are now than to wait for a buyer ’ s examiner to uncover them for you—throwing a twist in your timeline .
Set the Stage
Get a master to stage your home and create a ardent and inviting atmosphere that helps prospective buyers picture themselves living there. Consider hiring a master clean service sol everything is immaculate and smell decent. And don ’ thyroxine forget restrict appeal—you ’ ll need picture-perfect photos to get your home noticed on-line .
Price It Right
Buyers will pass on a home that ’ sulfur priced excessively gamey, without even taking an up-close front. So what ’ s the clandestine to perfect price ? Start by taking the emotion out of the equation. No matter how much you think your home is worth or what you owe on your mortgage, it ’ s the market that matters. A real estate of the realm agent can run a comparative marketplace analysis to show you how much homes like yours are selling for in your area .

3. Sell Your Home

once your dwelling is fix for the market, your agent can get it number and scheduled for showings. now you ’ re cook to sell your house ! With a well-prepared home and this hot market, enough of offers will head your way. Your agent can help you comb through the offers and negotiate a contract that benefits you and your timeline .
At this point, you might be itching to make a move on your own new home. But stay focused on tackling everything that needs to be done to sell your current home plate until you reach the close date. Any delays could complicate your transition to a raw home .

4. Fill the Gap Between Selling and Buying

By now, you should have a clearer idea of how long it ’ ll be between closing the sale of your stream family and when you can get the testis rolling on your new one. If you didn ’ t have any fortune negociate enough wiggle room in the sale of your home, you may need to find a impermanent set to stay and store your thrust ( which will credibly include budgeting for lease ) .
If that ’ s the case, gust out a massive social media message or get the word out at your workplace or community group to alert everyone you know that you ’ ra looking for a lease. possibly you can strike a discount and debar being forced into a rigid rent term. This way, you can be free to move a soon as you land a new home .
For more on how to fill the gap between selling and buy, here are other ideas :
Rent-Back Agreement
With a rent-back agreement, the buyer of your home agrees to allow you to stay in your home for a period of fourth dimension ( 60–90 days ) after the sale is final examination. In switch over, you allow for a lower selling price or lease paid to the buyers. This can relieve some of the press of finding a irregular home to stay and give you extra clock to house hunt .
This might sound like a big ask, but buyers in a competitive market are much will to be flexible with sellers if it means their offer is the matchless that gets accepted.

Contract Contingency
Another option is a contract eventuality. This is when you make an offer on your new home that states your purchase is contingent ( or pendent ) on the sale of your current home .
While the contingency protects you from having to pay on two mortgages, it can be a hazardous act in a hard seller ’ sulfur marketplace. With sellers frequently receiving multiple bids for their homes, an put up with besides many contingencies can easily knock you out of the running—and an unsold home is just about a boastful as a contingency gets .
Bad Options to Avoid
Don ’ metric ton be fooled by options your lender may offer to “ help ” you cover the fiscal challenges of buying and selling a home at the lapp time. These are loans that plainly multiply your risks :

  • Bridge loan: A bridge loan allows you to tap into the equity of your current home to pay the down payment on your new home. It’s basically a short-term loan that has to be repaid quickly. Here’s the catch: Payments are much larger than a long-term loan. And if you pay late, the penalties and fees are much larger too. Debt always creates risk. And bridge loans are extra risky because they’re tied up with the unpredictable timing of two home sales. That’s a financial burden you don’t need.
  • HELOC: This loan also gives you access to your home’s equity so you can use it on the down payment of your next home. But the HELOC (Home Equity Line of Credit) is dangerous because it usually comes with call provisions. This means your lender can demand you repay the entire loan in full—within a one- or three-year cycle! That could put you in a position where you’ll scramble to get a loan to avoid foreclosure. Bad plan.

5. Buy Your Next Home

Congrats—you sold your old home ! now you ’ re quick to follow some steps on how to buy a house. First, find a buyer ’ mho agent—or use the like real estate agent you sold your home with. Next, determine your down requital ( do at least 10–20 % ) either from your savings, the net income on the sale of your home, or both. If you can ’ triiodothyronine bargain with 100 % cash, get preapproved for your mortgage to avoid unexpected surprises that could delay your nasty timeline .
We recommend you never buy a house with payments that cost more than 25 % of your monthly take-home pay up. That 25 % specify includes chief, sake, property taxes, homeowner ’ sulfur insurance, individual mortgage policy ( PMI ) —and wear ’ deoxythymidine monophosphate forget to take homeowners association ( HOA ) fees into consideration. Use our mortgage calculator to enter your down requital measure and try out different home prices within your budget .
From there the steps are reasonably straightforward :

  • Go house hunting.
  • Submit an offer.
  • Get a home inspection.
  • Close on your house!

Why Buying a House Before Selling Yours Is a Bad Idea

You might be so focused on getting a newfangled home that you prioritize buying one before selling your stream home. If this means you ’ ll pile a second mortgage on your binding, you decidedly shouldn ’ t bargain before you sell .
certain, buying a modern home before selling your current home would make it easier to move. You wouldn ’ t have to worry approximately where to store your stuff or where to stay. But an easier move international relations and security network ’ metric ton worth the gamble and potential complications of having double mortgages .
Below are the chief reasons why you don ’ thymine want to buy a modern home before selling your old one :

  • Getting another mortgage could be tricky. Qualifying for a new mortgage will be more difficult, if not impossible, if you’re still tied to your current home mortgage—or if you’re relying on the sale of your current home for the down payment on your new one.
  • Your home might take too long to sell. Maybe you could actually handle paying two mortgages for a month or two. Still, a home sale takes time. Depending on your home, it could sit on the market for months or even a year! That’s a quick way to drain your emergency fund for something that isn’t a real emergency.
  • Emergencies could destroy your finances. With two homes (and mortgages) on your hands and no savings in the bank, it’s just a matter of time before you get hit with a busted water heater or leaky roof that’ll require immediate attention—and money.

Is It Ever Okay to Buy Before You Sell?

If you follow the design we teach at Ramsey Solutions and have reached Baby Step 7 and are living and giving like no one else, by all means, pay cash for that new family and worry about selling your other one former .
not indisputable if you ’ re there yet ? Ask yourself these questions :

  • Are you debt-free?
  • Do you have 3–6 months of expenses in your emergency fund?
  • Is 15% of your take-home pay going toward retirement?
  • If you have kids, are you contributing toward their college fund?
  • Is your current home paid off?
  • Do you have enough cash to put 100% down on the new house?

If you can ’ t say yes to all of the above, then hold your home-buying horses. No home is deserving putting your fiscal security at hazard. For the rest of us, the safest and smartest plan is to sell before you buy .

Can I Sell and Buy on the Same Day?

With the help and coordination of an adept real estate agentive role, you might be able to sell your current home and close on your future home on the same day. however, keep in judgment that a same-day close will require perfect time on three different timelines—yours, your buyer ’ second and your seller ’ s .
realistically, closings are frequently delayed for lots of reasons—maybe your buyer has difficulty getting a mortgage or your base inspector finds issues that need to be fixed before you move into your new home.

so don ’ t put all your promise into sell and buy on the lapp day—have a plan B to reduce the gap between closings a much as potential .

Find Agents to Help With Selling and Buying

With a little solitaire, a lot of hard bring, and an know real estate agentive role as your guide, you ’ ll be placing that Sold bless in your thousand and buying a new home in no time. For a flying and easy way to find agents we trust, try our certify local Providers ( ELP ) program. We have stern standards for recommending agents who plowshare our values—so you ’ ll only get the best .
Find a substantial estate agent we trust !

reference :
Category : Finance

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