The Best Way to Buy a New Home While Selling Your Existing Home
Buying a home and selling a home at the same time can be one of
the most difficult and nerve wracking of all real estate
transactions. Many people wonder how to juggle the selling of
one home with the purchase of another. They may be worried that
their home will not sell by the time the money is due on the new
home, or that they will be unable to find a suitable home after
their home has sold.
These are certainly valid concerns, but there are steps the
smart homeowner can take to increase the chances of a smooth
buying and selling transaction.
Right timing to buy and sell
The timing of the two transactions can be very important. Many
people find that they have the best chance of buying and selling
a home in the spring and summer months. The spring and summer
months of the year are typically the time when the inventory of
homes on the market is at the highest level. If you need to sell
your home in the fall or winter of the year, the time period
between finding a buyer for your current home and finding a new
home could be much longer.
Add contingency clause
It is also a good idea to tie the sale of your home to the
purchase of a new home. Consider specifying in the sales
contract that the sale of your current home is contingent on
your finding a new place to live. Failure to write this
contingency into the contract could leave you searching for a
temporary place to live if your home sells before you find a new
one. It is fairly easy to add a clause to your sales offer that
your offer is contingent upon the sale of your existing home.
This will protect you in case your home takes longer time to
sell than anticipated.
Sell first buy later
You're encouraged to put your home on the market before you
begin the search for a new property. That time differential will
allow you to gauge the local housing market and give you an idea
of how long it will take your home to sell. It will also give
you the ability to negotiate the escrow period in order to give
yourself plenty of time to find a new place to live.
When buying and selling a home, it is a good idea to have the
transactions close simultaneously if at all possible. This will
help you avoid the situation where you have to get out of your
present home before you can move into your new one.
Utilize same services
It is also important to remember that you are not obligated to
use the same agent for the purchase and sales transaction. That
said, using the same agent for the purchase and the sale might
give you leverage when it comes to negotiating the real estate
commissions.
Even though it is not necessary to use the same real estate
agent for the purchase and sale, it is advised to use the same
title or escrow company and the same real estate attorney to
handle the transfer of both properties. Using the same companies
for these important transactions will help ensure that both
transactions go as smoothly as possible.
In addition, make sure you get all your financial documents in
order and to fully investigate your financing options while your
home is on the market. This is crucial, especially, for buyers
who are selling their current home and looking for a more
expensive one. Furthermore, having a pre-approval loan document
in hand will give you greater negotiating power on the purchase
of your new home. Using the time your home is on the market in a
constructive way will help you a great deal.