Going on the market to buy and sell a home at the same time is a tricky undertaking and requires juggling a complex array of logistics and variables at once—not to mention taking some calculated risks. However, life happens and it is sometimes an unavoidable situation. If you find yourself in the position of having to buy and sell a home simultaneously, follow these tips from the Desrochers:
Know the Market
Before you make anything official, get to know the markets in both areas where you will be buying and selling. Getting to know the current real estate market will help you set expectations for what kind of offers you can expect to receive for your current home, and what you should expect to spend on your new one. With these expectations in mind, you can have realistic parameters in place as you begin the process of selling and buying.
Plan Your Process
Make a decision early on about how to prioritize your process—whether you want to buy first or sell first. Both have their merits. Buying first can be a tougher financial burden, but creates an easier transition between homes. On the other hand, while selling first comes with more financial security, buyers often wind up feeling rushed to make a decision and buy a home just to have somewhere to live. The best way to deal with this conundrum is to arrange backup housing if possible, a temporary rental or short-term lease to buy yourself some time to find a house you really love rather than settling for the first one that will do.
Secure a Bridge Loan
To provide yourself a financial security net, try to secure a bridge loan before you start to make offers. Bridge loans are a type of short-term loan that is frequently used to make a down payment on a new house before a sale on the buyer’s current house goes through. A bridge loan can significantly ease the financial transition between homes.
Negotiate Closing Dates
In an ideal world, the buying and selling process would unfold in unison and your closing dates would fall on the same day. Reality is seldom so convenient. However, with some negotiation (and a little luck) you may be able to synchronize closing timelines in your favor. Whether you end up selling first or buying first, try to push out the closing date long enough that you have sufficient time to get the other end of the transition locked in place. Sellers are sometimes reluctant to agree to drawn-out settlements, but making some other concessions in your closing negotiations might be enough for them to come around. It will be up to you to weigh the costs/benefits.