Buying & selling a home at the same time? Unless you are a first-time home buyer, chances are you will be selling your current home while simultaneously looking for a new one. Just thinking about all the variables in that equation might make one’s head spin.
The good news is that although the process is indeed complex, it happens thousands of times every day all across the country. For everything to go as smoothly as possible, it requires experience and a solid game plan, so here are four tips for buying and selling your home at the same time:
WORK WITH A REALTOR
Working with a reputable realtor is the best way to make buying and selling a home simultaneously a breeze. According to The National Association of Realtors, 90% of home sellers and 87% of home buyers use a real estate agent. Most realtors can serve as both a buyer’s agent and a seller’s agent, and working with the same person for both transactions will make scheduling and communication a whole lot easier! Your realtor will be able to work ahead to find Chevy Chase homes for sale that fit your anticipated budget and criteria while you are in the process of selling your current home.
Of course, if you are moving to another town or state, you may not be able to use the same realtor for selling and buying. In that case, ensure both agents know your timeline and goals. If possible, the agents should at least communicate with one another regarding any pertinent or critical details related to your real estate transactions. By handling all the marketing, scheduling, communication, negotiating, and details of the closing, your realtor(s) will save you a lot of time and stress.
TIMING AND LOGISTICS
The biggest question from clients regarding buying and selling at the same time is whether they should buy first or sell first. The clear answer is: it depends. In some cases, clients prefer to sell their current home before purchasing a new one. This scenario eliminates the possibility of having to pay two mortgages for a short time while you wait to sell your former residence. The potential problem is that if you cannot find a new home and close on it shortly after selling your current home, you might need to find a short-term rental or some other temporary residence. You’ll also need to keep all of your belongings in storage, and since the typical seller has been in their current home for eight years, there’s likely to be a lot of stuff to store!
For these reasons, many clients choose to buy their new home first. This allows them to move out of their current home and into their new home seamlessly. In the event that the home lingers on the market for several weeks, the client will need to ensure that they have the available funds to continue paying the mortgage.
An experienced realtor that knows the local market well should have a good feel for how quickly your home will sell. Similarly, they will also have firsthand knowledge of the current housing inventory and roughly how long it typically takes to close on a new home. While these will be “guesstimates,” your realtor’s experience with the market will likely result in reasonably accurate insight.
CREATE A PLAN
Before you list your current Bethesda real estate or begin looking at MLS listings for new homes for sale, it’s important to sit down and map out the logistics of the process. This is another aspect of these transactions for which your realtor will provide expert guidance. The process will look something like this:
- Select a real estate agent(s) and discuss your selling and buying goals.
- Begin the process of preparing your current home for sale.
- Begin looking for homes for sale in Silver Spring, MD.
- Early in the process, you should visit your mortgage lender and get either a pre-approval or a pre-qualification letter for buying a new home.
- Visit homes that you are interested in purchasing.
- Make an offer on a home you’d like to buy.
- A home inspection and appraisal will be completed.
- The mortgage lender will finalize your loan.
- Close on the purchase of the home.
- After you’ve moved out of your former home, hire a professional staging company (or have it virtually staged).
- Have photos taken of the house to include with the online listing.
- Your agent will create a listing to sell your home on the Multiple Listing Service (MLS).
- Your agent will notify you of any offers received and help you negotiate a fair and reasonable selling price.
- After you accept an offer, the buyer will arrange to have the home inspected, and the bank will require an appraisal.
- Finally, you will close on the sale of the home.
This is a very general plan, and every real estate transaction will have its own unique nuances, so the best advice is to sit down and map out your specific plan with your agent. The agent will ensure that you have all the bases covered and that everything will proceed smoothly.
ESTABLISH A BUDGET
Part of your buying and selling game plan will include a trip to see a mortgage lender and get approved for your home loan. Your lender will provide you with an application and have you submit documentation of income and debts. They will also need to know how much money (equity from your home sale plus any additional cash) you will have to put toward purchasing the new home. With this information and a check of your credit score and debt-to-income ratio, the lender will determine the amount of mortgage you qualify for. This is a key piece of information that will help you and your realtor target homes in the correct price range as you begin looking for a new home.
It’s wise to obtain either a pre-approval or pre-qualification letter from the lender, especially in a competitive housing market. Having the mortgage pre-approved, or better yet, having it already underwritten and ready to go, will give you a competitive advantage over other buyers that have yet to lock in their financing. In addition, having the mortgage locked in will also allow you to move quickly when you find a home that you love.
Although the dual process of buying & selling a home at the same time can be complex and somewhat daunting, having the professional assistance of an experienced real estate agent will be a welcomed asset. Michael Shapiro and his talented team at Modern Capital have the experience and know-how to provide expert help with all of your real estate needs.
