It is tough to successfully sell a home and buy a new one at the same time in virtually any market. Although logistics and coordination are certainly important aspects of the problem, they are not the only factor at play here. It is also challenging because, in order to close simultaneously, somebody has to take a risk, and in most cases, that somebody is the seller of the new property you are purchasing. When it comes to buying and selling a home at the same time, there is no one strategy that is more advantageous than any other. Your choices are limited by the amount of money you have available and the amount of danger you are willing to assume. If you are relocating from one city to another, it is also important to consider whether you will be entering a buyer's market, a seller's market, or both of these markets. Here are some other methods that you can handle this predicament:
Key Takeaways
Buying a new home before selling your old one is typically the easiest method, but doing so requires you to have a large amount of cash on hand if you can afford to do so. If you sell your current home first, the new owner may allow you to rent it back from them for a period of thirty to sixty days while you look for a new home and have it under contract. If you buy a new home with the agreement that you will sell your current home within a certain amount of time, you will be able to back out of the deal to buy the new home. In a market where there is a lot of competition, buying with conditions could make your offer less appealing.Put your money into a house
If you can afford to own both properties at the same time and a lender is willing to qualify you for a loan, finding the home that you want to buy first might be the best course of action for you to take. Providing evidence that you are able to afford both of your properties is one of the requirements for qualifying to own two homes. You might, for instance, demonstrate that you have the equivalent of six months' worth of mortgage payments saved up for both of your residences. You will need to provide evidence that you meet the requirements to own two properties at the same time, in addition to having the necessary funds for a down payment and closing expenses. You have the option of taking out a loan or using money from an existing savings account. If you use the money you already have, you can avoid paying interest, but you will also considerably reduce the amount you have saved. After the purchase of your new property is finalized, you will be able to move in and then list your current residence for sale. You always have the option to rent it out in the event that it does not sell before the market recovers. You should talk to a few different lenders early on to find out if you qualify for the different home loan programs that are out there.After the sale of your home, you can rent it out again
You have the option of requesting that the folks who are buying your property allow you to continue renting it out for a period of thirty to sixty days following the closing. This kind of possibility is known as a "rent-back contingency." Obviously, there are some people who won't agree with this, but it's something that should at least be considered as an alternative. You now have the opportunity to search for, purchase, and relocate to a new residence. Due to the fact that the property has already been sold, the purchase of your new home would not be subject to any conditions or prerequisites. The disadvantage of renting back your property is that you are under a time constraint, and even if the sale of your home does not go through, you will still be required to relocate.Timing is everything in order to avoid unplanned events
Once the transaction on the property you're selling is ready to close, you may be able to postpone the closing and make an offer on a different home before the sale of the home you're selling is finalized. If the potential buyer of the home you are selling has their mortgage application fully approved by their lender, then you may have a reasonable amount of confidence that the sale will go through. You have the option of delaying the closing so that it takes place on the same day that you close on the purchase of your new house if you and your real estate agent are satisfied that the buyer will go through with the purchase of your property. Naturally, the buyer needs to be open to the possibility of a delay. You run the risk in this scenario that even if the buyer doesn't close on the transaction, you might still be required to do so on the property that you are purchasing as a buyer.The first step is to sell, and then comes the purchase
There is less at stake than in any of the other possibilities, selecting this course of action is likely to result in the least amount of anxiety. The sale of your home has been finalized, you will have the advantage of knowing exactly how much money you will receive as a result of the sale of your property. The disadvantage is that you will have to move out at the closing, and since you have not yet purchased a new house, you will need a new place to reside as well as a new location to keep your belongings. When staying in a hotel or with friends or relatives for an extended period of time, some people decide to store all of their belongings in a storage unit. Others choose a rental agreement that is month-to-month and lasts for thirty days, which provides them with greater freedom about the timing of their move. However, regardless of how you look at it, selecting this choice will still require you to move both times.Buy with the intention of later selling
This is the circumstance that many people would consider perfect. You have made an offer on a new house, but the closure of the deal is contingent on selling the house you are currently living in. You will only need to relocate once, and you won't have to stress about maintaining payments on two separate mortgages. It is dependent on the seller as well as the current state of the market as to whether or not they are ready to wait. Your offer will be less appealing if it is contingent on the sale of your property. If you are competing with another buyer for the property and that other buyer does not have any conditions attached to their offer, the seller will probably choose the other buyer. Talk to an experienced real estate agent about how likely it is that you could buy a home after selling your current one.