How can I possibly manage to buy a house before my present home is sold? Selling is stressful enough! How on earth can I buy and sell a house at the same time?
I hear all the time that “I don’t want to sell until I find a new home.” This is great in theory but not always easy. Most sellers in a busy market will not accept a subject to sale offer!
The Hansen team has a way to avoid that situation. For details please contact Joan Hansen at Homelife at 604-220-7653
Here are some useful tips commonly used in buying & selling:
Firstly, find the Right Real Estate Agent
Start by doing some research in your area (How many times have you heard me say that?) and become aware of all the current real estate trends. It’s always best to start by finding an experienced and reputable real estate agent with whom you have or can develop a comfortable and compatible rapport. You will need someone who really knows the real estate market in the area in which you are selling as well as in the new area where you are interested in buying. The right real estate agent will know if it is a buyer’s or a seller’s market. It will be imperative that you know how quickly homes are moving and pricing in the present market. Develop a timeline, the listing price for the home you’re selling and how much you plan to spend when buying another home.
Choose the same agent for both the buying and selling process.Your real estate agent should be aware of your situation on both the selling and buying ends. Negotiating the length of your close, short-term rentals, rent-backs, and other ways to bridge the time between buying and selling, can all be managed by your trusted agent.
Contract Contingency Clauses and Bridge Financing
Do you need to sell your current home in order to have the down payment for your new home? Consider a contract contingency or applying for a bridge loan when purchasing.
If the purchase of your new home will depend on the sale of your existing home, keep in mind that the seller may not want to decrease their chances of selling by waiting for you to sell your home. You could lose your dream home if the market is competitive. The seller will need to believe that your home is being sold in a desirable market and priced competitively to sell quickly. If the home you want to buy has been on the market for a while, this could be a desirable option. Contingent contracts can lead to an effective agreement when each party has different time preferences.
Bridge loans allow you to own two homes at the same time if you don’t have the money for a second down payment. A bridge loan is short-term financing used until a person secures permanent financing or removes an existing obligation. Evaluate your options carefully before you make a decision. Not all agents advise doing bridge financing, it really depends on the market conditions
Factor in the Price of Your Next Home
When setting the price of the home you are selling, consider the amount you want to spend on your new home. Manage your expectations by allowing a cushion between what your present home is assessed at and the price of the home you wish to purchase.Make sure you cover your new purchase with the price you receive for your home. Your professional agent can assist you with fair market values.
Get a Pre-Approved Mortgage
It is crucial that you know what you can afford. Often, buyers who plan to move to a bigger home think that because they have a current mortgage, and a down payment, they will be able to upgrade. This isn’t always the case. Pre-approval will let you know your precise limit so that you won’t be disappointed when you find your dream home.
Between the Buy and Sell Process
Just in case everything doesn’t work on schedule, have a Plan B. A new home seldom closes at the same time as an existing home. A problem in either direction and you could be paying dual mortgages or end up temporarily homeless.
Be sure to put away an emergency fund to provide for this situation. You may have to stay in a hotel for a week or two.
A Rent-Back Agreement is also an option. This involves renting your home back from the buyer/owner for the time of closing until you move. The buyer may or may not agree to this. Whether this works will depend upon their own buying and selling situation.
Strategically Select a Closing Date and Time
The time and date of your closing can make buying and selling at the same time seamless when chosen strategically. Banks take up to two or three days to transfer funds.These transfers are usually done before 3 p.m.
Don’t schedule your closing for a Friday and always choose the morning hours. Having this buffer in your schedule will help close the deal on schedule and as planned.
Now that you and your realtor have developed a plan, you are ready to buy and sell your house at the same time. The process will be smoother and more successful with careful planning.
Best of luck in the selling and buying of your home!
For a free market evaluation and to discuss the best way to buy and sell a house at the same time please call me at 604-220-7653 (SOLD) Joan Hansen Homelife Benchmark Realty
If I cannot help I would be happy to refer a great agent in your area.