Buying and/or selling a home can be stressful. Now, imagine buying and selling at the same time! What? This process can be even more daunting if you need the money from the sale of your good-bye home to put towards your hello home.
In Utopia, your hello home would be ready to greet you as soon as you turn-over the keys to your good-bye home. But! We don’t live in Utopia, so back to reality. Often the time of selling a home and buying the next one don't align with each other. Rest assured, with an intune savvy Realtor and effective planning, both transactions can be executed smoothly.
Let’s look at a few things to consider to better manage your simultaneous transactions.
We all turn to our mobile devices and Google or Youtube for the most “sound” advice and direction. Well, at least I do! They can also be used to help you assemble a team. Thus, tip one, find an experienced Realtor and closing attorney. Using the same attorney and Realtor for each transaction will help decrease your stress level. A Realtor can let you know how long it will take to sell your home. Additionally, based on current market trends, they can provide an idea on your list price. List price! This is going to be based on the current condition of your home. Your good-bye home's condition not only impacts your sale price, but also the speed at which your home will sell. So, knowing your financial situation is critical and is tip two.
You are a planner and have everything covered. Therefore, I’ll just leave some questions to ponder over. Can you cover the down payment without depending on the equity from your good-bye home? What budget could you have available for a down-payment if you were to buy right now? How flexible is your timeline for moving and closing dates? Ideally, your closings will be on the same day, or at least within a few days of each other. BUT, what if your plan is derailed? You may not have the funds needed to close because you are waiting on your good-bye home to finally say good-bye! Well, there is a remedy for that! Get a contingency that provides a safe escape option for you, should your good-bye home fall through. Including a financial contingency would also be an added buffer if your financing is based on the sale of your good-bye home. You can also buy with a bridge loan. (I’ll cover it in a different blog.) Whew, I am all contingencies out. Now let’s explore timelines, tip three.
Understanding the timelines is oh-so critical! So, here is a quick run-down. Preparing your home for the market can take 4 to 6 weeks. Use this time to declutter (even sooner, if possible). Look at listed homes in your area and take notes. Examine, with a buyer’s lens, your home’s condition, honestly noting any potential issues. Your home is listed. Now you can start shopping for your hello home. This could take about 8 weeks or more, depending on the market. Woo Hoo! You accepted an offer on your good-bye home. On average, it can take about 3 weeks for a home to go under contract. A listing can be under contract for about 4-6 weeks prior to making it to the closing table. One important thing to note here, you can and should negotiate, not just the money but the timeline. You can negotiate closing dates and due diligence periods.
Here, we highlighted how having the right team goes a long way in helping manage your stress and this double transaction. Through all your planning, have you considered some key factors? In planning, the key is to be flexible and have realistic expectations of the timelines involved with these transactions. While we didn’t do a deep dive, keep super close tabs on your finances and credit. I understand buying and selling are challenging, but with the right Realtor/team, you will figure it out!