Many people find themselves selling their current home while buying a new one at the same time. Doing so is a complex process that means navigating the market as both a buyer and seller. Though recent reports suggest a cooling down in the housing market, you should still plan ahead to minimize the impact of any fluctuations or challenges that could arise.
Bee Realty Corp can be your trusted partner when simultaneously buying and selling a DeLand area home. Our agents can guide you through the process and share their wisdom on how to handle financing, strategic pricing, and negotiating in a way that works for you.
Should You Buy or Sell First?
As you might imagine, there are various schools of thought on whether it’s best to buy or sell a house first. Much of the decision comes down to personal considerations and comfort zones, but there are other factors you should consider. For instance, some experts say that if the house you’re selling has a mortgage, you should sell it before buying a new home so you’re not stuck with concurrent mortgages. However, others say it’s best to wait and sell later, so you’re not in between homes.
Pros and cons for buying before selling include:
- Pros. The most obvious advantage to buying a house before selling your current one is that you know you have a place to go to once you sell. Finding a good short-term rental can be time-consuming and challenging, especially if you have children and pets. Plus, if you have a new home to go to after closing on your old one, you don’t have to pay twice for moving expenses or worry about living out of packing boxes.
- Cons. As mentioned, having two mortgage payments at the same time can be financially taxing. If you decide to go ahead and buy and sell simultaneously, be sure to have a plan for how you’ll pay for both mortgages. It’s also good to talk with your real estate agent about local market trends and a realistic timeframe for selling your house.
Advantages and disadvantages to selling before buying include:
- Pros. Along with not paying for two mortgages at the same time, selling your property before buying a new one also means you don’t need to feel rushed into making a decision. If you’re fortunate enough to have a place to stay in between houses, it can be nice to be able to take your time and ensure you’re buying a home you truly love, not one you desperately need.
- Cons. On the flip side, selling your home before buying another one can mean leaving it up to chance that you’ll find something that fits your budget and lifestyle. In some cases, this is the point where homeowners decide they’re better off renovating the home they have and staying put.
Plan for a Smooth Home Selling and Buying Process
No matter how many times you may have done it before, buying or selling a home can be daunting, even in the best circumstances. Still, combining the two doesn’t need to lead to stress overload. Follow these five tips to streamline the process and make it a (nearly) stress-free experience.
Tip #1: Assess Your Situation
It’s always nice when the real estate planets perfectly align, but truth be told, that rarely happens. As the saying goes, if you fail to plan, then plan to fail!
One of the best ways to prepare for simultaneously buying and selling a home is by working with a reputable, experienced real estate agent. They know the area’s market situation and can tell you whether you’re dealing with a buyer’s or seller’s market. This can give you a sense of how quickly area homes are moving and what they’re selling for, both of which can help you plan your listing price, timeline, and budget.
If possible, work with the same agent for the selling and buying process. It can be invaluable when juggling buying and selling factors like rent-backs, short-term rentals, and negotiating the closing.
Tip #2: Contract Contingencies and Bridge Loans
Do you need to sell your current home to cover the down payment for your new one? If so, you’ll need to consider a contract contingency or apply for a bridge loan.
- A contract contingency or conditional sale means any purchase of a new home will depend on selling your existing property. This can be risky in a seller’s market and, if you’re not careful, could mean missing out on your dream home. If you’re dealing with a competitive market, the seller might not want to wait for you to sell your current home if they find another willing buyer. You and your agent will need to win over the seller to the idea that your existing home is in a desirable market, is priced right, and can sell quickly.
- Bridge loans are often a good option as they allow you to own two homes at the same time when you don’t have the funds for a second down payment. Your lender can help you evaluate your options before you make a decision.
Tip #3: Factor in Your Next Home’s Price
When setting your current home’s selling price, consider what you’re willing to spend on a new house and weigh it against the market value, and be sure to leave a cushion. For instance, if your existing home’s assessed at $390,000 and your new home is $350,000, then you know your bottom line is $350,000. Also, talk to your agent about what you’ll need to realize from your current home’s sale to afford the property you’re interested in.
Tip #4: Get Pre-Approved for a Mortgage
Knowing ahead of time what you can afford for a new home is crucial. Even buyers who have enough of a down payment and are making a higher income can’t always upgrade to a bigger, more expensive house. A mortgage preapproval keeps you from being disappointed, but, more importantly, it can make a seller take your offer seriously and help you land your dream home.
Tip #5: Have a Plan for the Buying and Selling Process “In-Between” Time
As it’s unlikely you’ll close on your existing and new homes on the same day, it’s wise to plan for multiple scenarios to avoid unexpected costs and being left without a place to live. If you don’t have friends or family willing to put you up, set aside a fund to cover interim housing costs for a month or more. Look into short-term rental options and ask your real estate agent if they know of any temporary housing options in the area.
Another option is a rent-back agreement where you rent your old home from the buyer, who’s now the new owner, from the day of closing until you can move into your new home. Depending on their own buying and selling agreement, they could be willing to accommodate you.
Work With a Real Estate Professional When Selling and Buying a House
Simultaneously selling and buying a house is challenging. A professional real estate broker is skilled at tailoring solutions for your specific situation and can ensure the process is as smooth as possible. If you take the time to educate yourself about the local market and prepare for multiple scenarios, you’ll find the experience much more enjoyable.
A good real estate agent will provide you with an honest evaluation of your buying and selling plans and help you meet your unique challenges and needs. They’ll be straightforward about whether now’s a great time to sell and buy or if you’re better off pausing your search for a short time.
If you’re hoping to sell and buy a home in the DeLand area, talk to one of the agents at Bee Realty Corp about how they can help you sell your existing home and find a new one fast. Our non-traditional approach to the buying and selling process makes us uniquely qualified to review your options and help you decide the best way forward. Contact us online or call us at 386-279-7522 to learn more.