Buying or selling a home is a big adventure; some daring thrill seekers may choose to take on both tasks at the same time. If you’re finding yourself in the position of needing to buy and sell at the same time, here are some tips to help you navigate the possibly challenging course ahead of you.
Evaluate Your Local Market
For most buyers and sellers, selling one’s current home before putting an offer on another property is their best real estate option. But for others, it really depends on the local real estate market. If you’re thinking of selling and buying at the same time, research the market in your target area. This can help you gauge whether it’s a buyer or seller market. If many properties are available, it might be a good time to list. If inventory is low, you may need to wait until the market picks up again.
The general rule of thumb is to sell first in a buyer’s market, and buy first in a seller’s market; but this isn’t always the case since every experience is unique. You can really get an understanding of what might work best for you by talking to your trusted real estate agent – s/he will know the market and will be able to provide insight on current trends.
Understand Your Finances
When it comes to buying or selling a house, finances are a huge part of both transactions. Whether you’re looking to sell or looking to buy, knowing your current financial situation is vital to your next steps.
If you have a mortgage loan, you will absolutely want to know how much equity you have in your home. The equity that has built up could be enough for a down payment on another home. It’s important to remember, though, that any equity is only accessible after closing.
If you currently own, don’t be afraid to have an inspection done to understand what repairs or work may need to be done to the property as this will help you understand how much you may need to deduct from the possible sale price or any concessions you may need to make for a future buyer.
Utilize A Contingency
Ideally, you would sell your home on the same day as buying a new one. Since this is not the case for most buyers/sellers, adding a contingency into the contract can be very helpful. But note: ‘contingency’ can have different meanings throughout North America. In this case a contingency is referring to a provision for an unforeseen event or circumstance when it comes to the financial ability to close a purchase sale.
If you want to buy before selling, make an offer with a home sale contingency, which means you will buy the new home once your current residence sells. You can also request an extended closing (if you’re certain your home will sell), which extends your closing past the typical standard of 30-45 days.
If you want to sell before buying, you can make an offer with a settlement contingency. This contingency works when you have an offer on your home, and you want to buy another which means you’ll buy the home contingent on the sale of your existing home.
If you happen to sell and haven’t made an offer on another home, you can sign a rent-back, which means you go through with the sale of your home, but you rent the home back from the new owners for a specific time (anywhere from 60-90 days), giving you time to find a new home or make other living arrangements.
Buying and selling are big events – if you’re unsure of where to start or if you should do both at the same time, it’s best to ask for help. Your local real estate agent can provide insight into the market and what other buyers and sellers have encountered. Ensure your finances are up-to-date and have a good idea of what you can possibly get for your home. If you have to search for another home while selling, have a backup plan if you can’t find another home in time.
Real estate across North America is still as popular as ever. Have a target area in mind for a new home? You can search for all active properties on my website: gulfcoastbeachproperty.com\. Feel free to reach out to me with your real estate questions: LisaEllisRemax@gmail.com. Here’s to a fun and exciting summer for you and those you love!
Lisa Ellis
RE/MAX Of Orange Beach