Buying and selling a home simultaneously is a complex process that requires planning, financial preparation, and expert coordination. Whether you’re upgrading, downsizing, or relocating, managing both transactions at once can be stressful. Here are some ways to help streamline the experience and avoid costly mistakes as you navigate the buying and selling process.
Understand the market conditions
Before you even enlist a real estate agent, research the local real estate market. Is it a buyer’s or seller’s market? If it’s a seller’s market, inventory is limited, and homes sell quickly, often at the asking price or above. A seller’s market will give you an advantage when listing but may make it harder to find a new home. If it’s a buyer’s market, you may have an easier time purchasing but might need more time to sell your home. Working with a real estate agent who understands the local market trends will guide you through the timing of both buying and selling simultaneously.
Work with an experienced real estate agent
An experienced and knowledgeable agent can help you time the market, price your home correctly, and negotiate in your favor for both transactions. When interviewing agents, it’s helpful to ask about their experience helping clients navigate buying and selling simultaneously.
Get pre-approved
If you’re financing the purchase of the house with a mortgage, have your pre-approval letter in hand before you begin looking for homes. It will give you a clear understanding of how much you can afford and whether you qualify for a new loan while still holding your current mortgage. If you’re using proceeds from your sale for your new purchase, explore financing options like bridge loans or home equity lines of credit (HELOCs).
Declutter and stage your home early
When you’re buying and selling, many factors are out of your control. So, it’s helpful to do what you can to control the timeline. Preparing your house to go to market early means possibly reducing the amount of time your home is on the market. Cleaning, decluttering, staging, and minor repairs can result in a fast home sale.
Create a contingencies
Including contingencies in the contracts can help protect you from financial strain. Two common contingencies to include are:
- A home sale contingency will allow you to buy a new home only if your current home sells.
- A home purchase contingency means your home sale is contingent upon finding a new home.
Strategically time the transactions
It’s ideal for both closing days to be around the same time to avoid the stress of juggling two mortgages. By working with your real estate agent and lender, you can accomplish this by:
- Selling first: This can reduce financial risk, but you may need temporary housing.
- Buying first: If you can financially manage two mortgages or you’re paying cash, this ensures you don’t rush into a purchase.
- Simultaneous closing: With precise coordination, you can sell and buy on the same day.
Consider a rent-back agreement
If you sell your home before securing a new one, consider negotiating a rent-back agreement. This would allow you to stay in your home for a specified period after closing, giving you extra time to find and transition into your new home.
