It’s stressful enough buying or selling a home for yourself and your loved ones. It’s likely the biggest investment of your life, after all, and you want to be sure that everything goes as smoothly as possible and you get what you’re looking for.
But what if the stars align and you find yourself in the unenviable position of having to buy and sell homes at the same time, for whatever the reason?
Well, this can understandably be difficult. Difficult, but not impossible!
Every day in every state in the nation, there are people attempting to sell their primary residences while also exploring the buyer’s market at the same time.
There are a few tips that can make this process go smoothly for you, however, and we’re going to go over a few of those with you here today. Many of these suggestions have been made by real estate professionals and have been highlighted in different financial publications around the United States, including Forbes and the Wall Street Journal.
Let’s begin with a few ideas on ways you can maneuver the process if you’re buying a home before you’ve sold your existing residence.
Tip #1 – Use a Home Sale Contingency. – This is the simplest and easiest way to deal with this unique situation, and one that allows you a pre-determined period of time to find a buyer for your old home before proceeding to settlement on your new one.
If you can’t find a buyer in time, you have the option to either extend the contract or back out of the deal. These types of deals are unfortunately not as common as they used to be, as they’re not always the best deal for the seller. But that’s not to say it’s not worth a try.
Tip # 2 – Get a Bridge Loan. These are short-term loans that allow you to pay off the mortgage on your old home, which can temporarily alleviate some of the financial pressure involved in this process.
When your home sells, you simply use the proceeds to pay off the bridge loans and then continue enjoying your new home and property. If everything goes smoothly, this can be a great option.
But keep in mind that these types of loans generally have shorter terms and higher interest rates, so be sure to do your due diligence before making a final decision.
Tip #3 – Keep Two Properties for the Short Term. Now granted not everyone can pull this off financially. But if you’re able to do so, this is also the safest option as it keeps you from having to obtain any additional financing or convince another seller that a contingency is a good choice.
If possible financially, this is definitely the best option on the board.
Now that we’ve given you a few tips on ways you can make this unique process work when you’ve bought a new property first, let’s flip the script and give you a few tips if you’ve actually sold your existing home first and are looking for a new property to purchase.
Tip #1 – Use the Settlement Date to Your Advantage. Schedule the settlement date for your new home as close as possible to the closing on your old one, so you can simply move from one property to the next.
If your buyers are reluctant, you can even make compromises in other areas so that both parties are satisfied with the outcome. Remember to negotiate in good faith, and chances are good that you can make this work.
Tip #2 – Find a Short-Term Rental. If for some reason you have a gap between selling your old home and moving into your new one, you can always scour the want ads to find a rental home you can live in on a short-term basis.
Keep in mind that leases of less than a year in duration can be more expensive than longer-term ones, but you’ll need someplace to stay for a short time.
And if the rental home is smaller than your old one, you can also rent some temporary storage space as well.
Tip #3 – Ask for a Rent Back Contingency. This is where you’re simply asking the people who bought your old home to allow you to rent it from them until you’re able to move to your new property.
They don’t have to agree, but it certainly doesn’t hurt to ask. All they can say is no, right?
For even more buying and selling tips, give us a ring today at 302-260-2000 and talk to one of the coastal region’s top real estate agents here at the Oldfather Group.
We’d love to hear from you!