Selling one home and buying another at the same time requires solid financing, careful planning, flexibility, risk tolerance, and creative transaction management. If possible, sell before you buy. You probably started looking online at homes for sale before you explored what it would take to sell your current home. While it’s good to know about housing inventory for sale, the first step is to sell your current home.
How can you manage two transactions?
Whether you sell first or buy first, these steps provide critical information. Talk with your real estate agent about the current housing market, and determine a market value for your home. Your agent will also provide an estimated amount of cash you can expect from a sale. Next, unless you can pay cash, talk to your mortgage lender about financing your new home.
- Can you qualify for your next home without selling your current home?
- Can you obtain a bridge loan secured by equity in your present home to fund a down payment so you can buy first, then sell?
Once you have gathered this information, you are well prepared to shop for your next home.
SELL First then BUY
Consult with your real estate agent about how to prepare your home for sale, which may include a home inspection, making necessary repairs and cosmetic changes. Discuss the best time of year to sell your home. Spring and fall are busy buying seasons, but other seasons may have less sales competition. In our busy Northern Colorado market you usually can sell your home in any season!
Once you list your home for sale, you may begin the search for your next home. However, in a seller’s market, you can be a more competitive buyer if your current home has sold.
When an offer is submitted, evaluate options for a longer escrow period, or a leaseback, to allow time to find your next home. To be flexible with closing and possession dates for your sale and purchase, consider temporary housing options. Once you accept an offer and are ready to look for a new home, wait to submit an offer until you resolve most of your buyer’s contract contingencies.
BUY First then SELL
You found a home to buy and completed the research, but your present home is not listed for sale. In a buyer’s market, you may find a seller who willing to accept a contingency for the sale of your current home. In our Northern Colorado seller’s market, contingent offers are less desirable than those with no sale contingency. Builders may accept a contingent offer due to the necessary time frame for home building.
If your offer to purchase is accepted, it’s important to quickly prepare and list your home for sale. Consider pricing that will result in a contract quickly. This may not be the time to “try” an above market price with the intention of reducing the price later. Focus on selling your house with flexible showing times and maintaining your home’s appearance.
When you get an offer, you will likely be considering contingencies and deadlines that impact your purchase transaction.
When you’re selling your present home and buying your replacement home, understanding the process and your options ahead of time will better prepare you for challenges.
Contact an agent to discuss your next move!