By itself, selling or buying real estate is a complicated process that takes up both time, money, and effort. There are seemingly endless things you will have to consider and get done, while also packing up your belongings and — for most of us — keeping down a day job. Needless to say, when done simultaneously, this endeavor becomes an all the more intimidating task to take on. What’s more, when you are both selling and buying, any benefit you may get as a seller, will become a challenge when you are house-hunting. While there is simply no way around this problem, you are able to minimize the impact of any challenges that may arise whilst you are trying to buy and sell a house at the same time. Here are some tips on how you can go about it.
While you may be trying to buy and sell concurrently, that is basically impossible as one transaction would have to come first. This may come on a ‘whichever comes first’ basis, but it does not have to be. So, which transaction should you focus on pushing forward first?
Buying Before Selling
Some buyers might be able to purchase a home without selling their current abode for the time being. Unfortunately, that would be incredibly financially taxing and is simply not a luxury that most of us have. As such, if you are considering buying a house before you sell your current estate, make sure to address the following:
- As you will need more time to sell your home before moving into the new house you purchase, be sure to ask your agent to request for an extended closing as part of your purchase offer. Most places should allow you to obtain an extended closing of 60 days.
- While you are focused on buying a house, you must ensure that the house you wish to sell is ready to be listed on the market. While you may request for an extended offer, you will still be on a time crunch so more than likely, you will either have to have listed your home, or will be listing it as soon as possible. This means you will have to make sure that your current abode is presentable to prospective buyers looking to tour your space.
- Most may be aware of this, but you can make your purchase offer contingent on selling your current house. Having this contingency in your purchase offer will allow you pull out of the purchase in the event you are unable to find a buyer for your current home in time. This will allow you to back out of the deal without suffering legal or financial consequences.
That being said, what are the pros of taking a buy first approach? First, it will give you more time to find the right home and ensures that you will have a new home once your old house sells. Furthermore, it will save you the cost of renting a residence in the interim and you will only need to move once.
Selling Before Buying
Alternatively, you may wish to sell your house first, particularly if you are looking to make a profit from your sales. Selling first would allow you maximize your earnings from the different in the selling and buying price. If you are planning take a sell first approach, here are some things to keep in mind:
- You will need a place to stay whilst you are looking for your new home. Most buyers will want to move in as soon as possible, so to avoid being stranded, make sure to request for a lease-back. This will give you 60 days after selling your home wherein you will be able to live in your current abode on “rent”.
- While this should already be done when you are preparing your house for sale, make sure to store your personal belongings in storage units before selling. This will make the process smoother for you when you need to move out. Furthermore, it will be easy to keep your things in these storage units in the event you need to resort to renting a temporary residence as you house-hunt.
So, what are the benefits of selling first? The main draw of selling first is that you will not need to upkeep to mortgage payments as the sale of your old home is pending. Furthermore, it is much easier to apply for a new home mortgage when you do not have an existing mortgage payment on your credit report.
