Buying and selling a property at the same time requires extensive multitasking. Furthermore, time, money, and personal issues can all put you under stress. You will need to do a lot of research, practice your negotiating skills, and have a lot of patience. In a perfect scenario, you would prepare and quickly sell your property as soon as you put it on the market and then have enough time to plan for the next stage, which is purchasing a home. However, things rarely go as anticipated, especially when external factors are involved. But, with a good plan and a solid strategy, you can buy and sell a house at the same time without much stress.
Here are some strategies to ensure a smooth closing and a purchase that meets your needs.
Strategy 1: Buy before you sell.
While some homebuyers can afford to buy before selling, this is not the case for most. Many buyers need some time to assess their financial affairs and determine what they can afford. In some cases, they can make a contingent offer, but the chances of winning are not strong. Most home sellers prefer to sell to buyers that can guarantee a fast and non-problematic closing. However, you can make things work for you by following a few tips.
Request an extended closing.
When you need to buy yourself some time to set everything straight, ask for an extended closing. You can request a period of 30 to 60 days, during which you need to find a buyer. When you finally sell your house, you will have the home equity to help you buy the property you want.
Make a contingent offer.
As with the extended closing, this option works when you can’t afford to buy a property before selling. A contingent offer simply means that you are interested in a property but will only be able to purchase it if you can sell your current home. Furthermore, a contingent offer does not obligate you to do so if you change your mind or can’t sell your home. You can withdraw your offer without legal consequences and recuperate your deposit.
Get a bridge loan.
When using a bridge loan, you can pay off the mortgage on your current home and use the difference for the down payment. At the same time, you can use the bridge loan as a second mortgage to borrow part of your home’s equity. In reality, bridge loans are there to fill the gap between the buying and the selling time. They do, however, have higher interest rates than a mortgage loan, but you can pay them off faster. In many cases, buyers don’t even need them if they are fortunate enough to close the sale before the purchase.
Pay in cash.
If you have the possibility, buying your dream home in cash is always preferred. Cash offers made with your savings, or borrowed money will always put you at the top of the sellers’ priority list. Cash offers are the most appealing to sellers since they offer a smooth and quick closing process. However, keep in mind that you need to cover expenses other than the property price. Closing costs, home inspections, property taxes, and moving expenses are just a few examples. Therefore, before making a cash offer ensure that you have enough money to cover all of them.
Pros and cons of buying before selling.
There are some pros and cons when you buy and sell a house at the same time, and buying comes first. For instance, one pro is that you have enough time to look for the perfect property. When you find it and buy it, you can move in right away, even before selling the old house. Also, you need to pay for moving expenses only once. The experts at Best Cross Country Movers recommend finding a reputable moving company in advance. When you find the property you want, do some research on movers and get multiple quotations. That way, you will be better prepared when it’s time to move in.
When it comes to the cons of buying before selling, these are more financially related. For instance, you might need to get a second mortgage, and you might not be able to make a competitive offer. Additionally, you might feel rushed into selling your home faster and accepting a lower offer.
Strategy 2: Sell before you buy.
As in the previous scenario, there are tips that you can use to have a smooth sale and then proceed with the purchase. In this situation, however, you will need more time to prepare your home and ensure that you will find a buyer. So let us look at what you need to do to ensure a successful sale.
Before you do anything else, you should declutter the house. The items that are in the way should be the first to go. As a result, begin by making an inventory of your belongings and sorting them. Keep what you need, donate what is still in good condition, and throw out useless items. Regarding furniture, you need to decide whether you want to move your furniture or buy new ones after your move. You can decide on what to keep only after an objective evaluation. If it’s in good condition, is valuable, or has sentimental value, move it to a storage unit until you move into your new home. If the furniture is damaged and has to be repaired or reconditioned, it’s better to buy new furniture for your new home.
After you clear the house of all the unnecessary items, it’s time to clean. Start from top to bottom and go through each room. Please focus on the bathroom and the kitchen, as they are the rooms that can make or break a deal in a home sale. Don’t overlook hidden spaces and hard-to-reach corners, as buyers will closely inspect every inch of the house.
Call for a home inspection.
A house inspection will ensure that everything is in working condition. If something is either broken or not functioning correctly, fix it or replace it ASAP. At the same time, add some home features that buyers are interested in to raise the chances of finding a buyer quickly. Also, this can help you increase the value of your property.
Depersonalizing, redecorating, and improving curb appeal is part of staging a home for sale. Therefore, pay close attention to each of them or hire experts that can help you with staging. The cost of preparing your home will go up, but you will likely get that money back once you sell the property.
Put your home on the market.
After you finish preparing your home for sale, take some professional pictures. Then, research the market and see the price of similar properties. The closer you are to a fair price, the higher your chances of finding a buyer or even a couple of them. Put your home on real estate sites, add pictures, mention the price, and wait for offers.
Pros and cons of selling before buying.
As mentioned before, if you buy and sell a house at the same time, it’s not easy whichever one comes first. However, each of them has a few pros. If you sell first, you won’t have to take on two mortgages. Also, it’s easier to qualify for a new mortgage after you pay off the first one. In addition, you will know exactly how much equity you have for the new home.
There are a few cons to selling first that can be rather unpleasant. For instance, you might need to rent a place until you find and buy your new home. That means moving two times and paying two moving expenses. Furthermore, property prices may rise after you sell, requiring more funds for your next home.
Do you want to buy and sell a house at the same time? Then which transaction is preferable if it happens first, buying or selling? The answer to this question will help you prepare the best plan for each circumstance. Furthermore, you will have the least amount of unanticipated complications.