In an ideal world, you could put your current house on the market, sell quickly to get the equity out of your home to use for a down payment, and find a new home just as quickly. It’s not always that simple, and you should expect some overlap as you navigate how to buy and sell a house at the same time.
We’ve created this guide that covers common challenges you could face and how to make the buying & selling processes easier.
Funding your new home
It may be difficult to come up with the money for a down payment on a new home while your equity is still tied up in your current home. Especially if you are spending the extra money to put repairs or updates into your current home before selling.
The timing of the purchase & sale, negotiating with both sides, and organizing your belongings for a move are all happening at the same time. This is where the help of a real estate agent can take some of the stress away from you.
Some homeowners decide to make their offer on a new home contingent on the sale of their current home. In this case, there’s a very real possibility that your offer may lose to a non-contingent offer.
With these challenges in mind, here are some ways to make buying & selling a house at the same time a smoother process.
What to do if you sell first
Clean & declutter
Purge your house of any unwanted items & deep clean your home. Move any extra furniture and boxes into storage or to the garage to help create a sense of space and openness. Remove any personal items (like family photos) from display. This allows buyers to see the home in a clean slate and get the feel of living in the home themselves.
Take care of maintenance & repairs
Deferred maintenance or repairs should be resolved before you list the home (if possible). This can make the home more attractive to buyers and expedite the selling process. Some sellers geet their own inspection prior to putting their house on the market to ensure that all repairs are taken care of.
Decide on contingencies
If you need extra time after your home sale to complete the purchase of your new home, you’ll need to decide what kind of contingency you plan to include with the listing.
What to do if you buy first
Get your finances in order
If you buy a home first and your previous hone doesn’t sell right away, you may end up on the line for two mortgage payments. Remember, the equity in your current home won’t be available until you close on the sale, so you may need cash reserves to cover the down payment on a new home. Or, you may be able to use a bridge loan – a form of short-term financing that helps bridge the gap between buying & selling.
Look at your current home’s potential value
It’s important to get an idea of your current home’s value early on. This way, you’ll know what to expect from the listing & sale price of your home. Get an appraisal and connect with a local agent to get an accurate value based on a comparative market analysis.
Be flexible with contingencies
If carrying two mortgage payments isn’t feasible, one possibility is to make a contingent offer. This includes a condition that you’ll only buy if your current home sells. If it doesn’t sell, the contract states that you won’t lose your earnest money. This eliminates your financial risk, but it also weakens your offer.
In the 2022 housing market, it’s still common for buyers to have few or no contingencies at all. That doesn’t mean that you can’t add contingencies to your offer, but be sure to talk to your agent about the best way to handle your offer.
Find an Agent
Partner with an experienced agent to guide you through the process. Team Melton has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started on selling your home!