SELLING AND BUYING A HOME AT THE SAME TIME
If you’re a homeowner planning to move, you’re probably wondering what the process is going to look like. You may ask …
Is it better to start my home search/find my next home now?
or
Should I sell my current house first before I go out looking?
Answer … yes, and yes!
There are many moving parts when you are a current homeowner and looking to make a move. Making the right moves first, will eliminate a lot of the stress moving forward … literally! First and foremost, hire an experienced/knowledgeable local real estate professional who will walk you through the process. Then together will assist you in formulating a plan, on what strategy makes the best sense for you on how to move forward. Hiring a real estate professional who knows your local market and understands what’s working and what’s not right now will put you in a better position in the market. They will be able to make recommendation based on their expertise and your needs.
Let’s break it all down, to see what plan might work best for you. But I will just say this … do keep in mind, while you think you know which way may seem best for you, that too can change. Sometimes things happen as you are going through the process that you may not have expected, which in turn, could change your direction.
I always council my seller and buyer clients who are considering entering the market to just “be ready.” And when I say be ready – as a seller – you will want to have your home as “show ready, as possible – discussing with your agent, what that will look like to you, at your first or second meeting. Having these conversations with your agent right at the beginning is very important, as it will set the stage for your success.
My experience has found that as a seller, you may think you need to do this and that … when in reality … you may only need to do “this.” While many sellers are aware of what they need to do to get their home show ready, I more often find sellers get overwhelmed with all they think they need to do. Talking it out with your real estate advisor and prioritizing the important things will help guide you through the process with much more ease. Whether its repairs or minor/major upgrade, an experienced agent will explain to you, that while some upgrades can be important to do in gaining you top dollar – it also may not be as important as you think. He/she will explain that in many cases, depending on the upgrade will advise the seller that they should not expect to receive dollar for dollar back on their investment. So, choosing wisely is important. Your advisor will be able to give you guidance on what things are important to do or not, so that it will gain you the most value in your home sale. Perhaps you are one of the lucky ones, like many – who are just “show ready” right from the get-go – so nothing to do here. As a seller who is looking to buy, whether you will decide to sell first or buy first before selling … the above strategies, become ever more important in putting your best foot forward towards a successful move.
As a buyer – who is also a homeowner, considering buying first then selling your home after – understanding this process fully, is so important. Your real estate advisor will discuss many factors which will come into play as to whether this is a feasible option for you or not. Or do we have to put another strategy in place to accomplish your goal. Such things to discuss are – do you currently have a mortgage on your existing home; do you plan to purchase the home through the equity of your sale, or do you have the cash in the bank to buy the home outright? If you are going to finance your purchase prior to selling, you will want to speak to a lender to get pre-qualified/preapproved for a mortgage. By doing so first, you will find out what options may or may not be possible given your financial make-up. If you cannot buy before selling … don’t be discouraged, as this is the case for many homeowners looking to buy, and we have a “plan, a strategy for that.” 🏡. Speaking to an experienced and knowledgeable real estate advisor will give you the tools and strategies to accomplish your end goal.
SOME ADVANTAGES TO SELLING YOUR HOME FIRST
You Will Unlock Your Home Equity
The first step in the process will be to have your agent prepare a Comparative Market Analysis (CMA) for you. This analysis will be the “tell all” of how much equity you hold in your home, which is key. Knowing your current homes value is so important especially when you are looking to sell and buy at the same time. Knowing your home’s value should give you a good idea of what your budget will be on your next home purchase, if you are counting on using that equity for a down payment or better yet, an all-cash purchase on your next home. Selling your current home before you buy your next home allows you to access the equity that you have built up through the years and gives you the upper hand as a buyer.
Making an offer on a property, with a contingency of sale “Hubbard’s Clause” may not put you at the top of the list of seller’s choice, should there be multiple offers on the property. This is not to say sellers would not accept a Hubbard’s Clause, as I have seen a few, even in today’s market – just given a choice – maybe not so much. It truly depends on the market we are in, and it also depends on where you are in that process of selling your home – Is it on the market? Has a buyer been located? Have inspections been done? Is their buyer applying for a mortgage, or are they a cash buyer? You get the idea … The closer you are to the closing table many of the obstacles have been removed.
You Won’t Be Juggling Two Mortgages
Trying to buy before you sell means you could wind up holding two mortgages – if you are approved to hold both, great! But even if you need to hold both for just a few months, it can get expensive, fast – especially if there are unexpected repairs or delays. Selling first removes that stress and helps you move forward without the financial strain. But the caveat to this is – “How do I do this, and not be homeless?” you ask. Read on …
You’ll Be in a Stronger Position When You Make an Offer
Sellers love a clean, simple offer. If you’ve already sold your house, you don’t need to make your offer contingent on that sale – and that can help you stand out. Your agent can position your offer to be as strong as possible, so you have the best shot at getting the home you want. This can be a big advantage in competitive markets such as ours, where sellers prefer buyers with fewer strings attached.
One thing you will need to keep in mind if you are selling your home first. Like with anything in life, there are tradeoffs. As you weigh your options, consider this potential drawback:
Where will you live if you haven’t secured your next home?
Things to think about once your house sells – you may need a short-term rental or stay with family or friends until you can move into your next home. Your agent can help you negotiate things like a post-closing occupancy (renting the home from your buyer for a set period of time – we call that a “rent-back” This is where the property closes, title is recorded with the new buyers take ownership. And then you, as the once be owner – will rent-back from their now buyer/ owner for a specific period of time, which has been agreed upon by both buyer and seller. Got it? This avoids the seller having to move 2x, avoiding storage costs, and just streamlines their move by giving them a little time. The upside to the buyer is – if they are and can be flexible with their move – offering the seller a rent-back option – may just get them the home they were hoping to secure by getting their offer accepted, especially if they are in a multiple offer situation. Most often when we list homes for sale, and the seller has not secured a home yet, and is seeking suitable housing – that would be something noted in the listing, so the buyers are aware that being flexible with closing dates is an important factor of offer acceptance to the seller.
Selling first helps you buy with more confidence, more financial power, and less pressure no doubt, but the comfort of knowing where your next home will be – may be more pressure in and of itself. If you recall, I started this writing by stating …
Is it better to start your home search/find your next home now?
or
Should I sell my current house first before you go out looking?
Answer … yes, and yes!
I know I laid out many options when it comes to “should I buy or sell first” – if you have the CASH to purchase your next home prior to selling – that’s great! If you have a place to stay after you sell and before you buy – that’s great! But in all my years of experience, many sellers have limited options and they need to “sell to buy” – so my strategy is simple –
Put both wheels in motion – “Be ready in your sale and be ready in your home purchase all at the same time”. As a seller you need to get out there and start looking to see what types of homes are out there that will suit your wants and needs once your home sells. Begin your search early, while getting your home ready for market. We can market your home while protecting you with the contingency of sale “seller to find suitable housing” – so you are not homeless – giving you the time you need to find your next home. Granted, buyers aren’t going to wait forever, but if you are looking, you will have gauged the process, and then leave it up to your real estate advisor to negotiate timeline to close on your behalf.
It only takes “one” house to make it your “new home’ … Let the search begin and see how your next chapter unfolds!!
HIGHLIGHTING OUR LOCAL BUSINESSES
Have MOLD? No problem! Green Home Solutions of Western Connecticut is my go-to when it comes to these types of issues. No job too big or small. Professional, very knowledgeable, with great customer service. They get the job done thoroughly and quickly. David Robles/Owner, explains everything that is going on and how they can best remediate the issue. Dave and all his service team members are great to work with. Dave can be reached at 914-772-0026.
If you are interested in receiving “Laura’s List Of Service Providers” – feel free to reach out to me, I would be happy to share!
Laura
The Key To Your Real Estate Success
Helping buyers and seller achieve their real estate goals