How to Buy and Sell a Home at the Same Time
Whether you are a first-time home buyer or an experienced homeowner, simultaneously buying and selling property is quite the challenge. Since you have to juggle twice the amount of workload, it's best to inform yourself of what lies ahead. The difficulties you will have to surpass will be even more pronounced if you cannot sell your home or find a suitable new home. For this reason, we discuss how to buy and sell a home at the same time so that you can wrap up your relocation successfully.
In recent years, most real estate markets have been dealing with a shortage of buying opportunities as so few properties are available for sale. And where there is a lot of demand, there is a lot of competition as well. Of course, this is something you can neither anticipate nor avoid. The only thing you can do is to use a strategy that can help you go through the process a bit more easily. Let's see what could help.
Get a professional valuation of your property
One of the crucial steps when you are under pressure to sell your home is to get the property valued by a professional. Having an excessively high asking price for your home may result in it lingering on the market too long. In that sense, knowing just how much your property is worth is the first step toward selling it quickly.
What's more, it helps to get a second opinion so that you can set your expectations straight. This will allow you to not only advertise your home confidently but also give you an estimation of the budget you will have to purchase your new home. Furthermore, the valuation is also useful as it can reveal what may be the features of your home you should highlight as well as the renovations projects you can implement to raise the value of your home.
Have a clear budget and stick to it
The key to selling and buying your home at the same time is to work out your financial situation at the outset. As mentioned, you can hardly expect to find a suitable new home or facility without having a rough estimation of what you can afford. Furthermore, in cases when you use the money from the sale and forward it to the purchase budget, you should make sure to have the buyers of your old property pay the deposit before you go into the negotiation process for your new home.
Consider the additional costs involved
Many people looking to buy and sell a property at the same time fail to consider the additional costs. If you are getting out of a mortgage, you might be able to account for the fees through monthly installments. Then you have the real estate agent fees for selling and legal processing fees for both buying and selling. Finally, take into account the fact that you also have to finance a relocation to your new home. All of this should be accounted for you to be able to sell and buy a home at the same time.
In most cases, buyers have to wait to close the sale of their home before they can think about purchasing a new home. In fact, this is the financial reality of most people looking to buy a new home. However, you may be able to rely on a contingency offer. This means the homebuyer agrees to a certain amount of time within which they should sell their current home and invest the money into the new home.
In other words, when you give an offer to the seller of the home you are interested in buying, you can define a set of contingencies that protect you from common issues that may occur. Therefore, you can set down a condition under which you may vouch to purchase the house only when you manage to sell your old home. In that way, you are legally allowed to back out of the purchase if it happens that you cannot sell your home in the given time period.
This allows you to go into the process of buying and selling property at the same time securely. Furthermore, you will also be able to protect yourself from financial losses and carefully plan out the entire process, especially in unforeseen circumstances. For instance, you might have to financially settle an important, but unpredictable family matter such as the death of a loved one or drug addiction rehabilitation. As your loved one focuses on the importance of aftercare in recovery, you should ensure you're covered financially. Securing your finances can help you stay on the right track in case such financial difficulties make it impossible to sell your home at the time.
Consult a mortgage broker
A mortgage broker can be of great help in this process, especially if you have a running mortgage on the home you are currently living in. So, instead of having to pay out your mortgage, you might be able to buy a new home and port your mortgage from your old home. In other words, you should consider the option of transferring the mortgage from your current property to the property you plan to purchase.
Take into account that in some cases, it might be a better idea to just get a new mortgage from a different lender. But knowing where you stand is crucial precisely because you may also have an obligation to pay an early repayment charge if you take out a new mortgage before settling the old one. For this reason, it is crucial you take into account the mortgage broker's opinion.