Financial Mistakes All Potential Homebuyers Must AvoidWhen you are in the market to purchase a new home, you want to receive the best deal possible. You want a home that is a terrific investment,
Buying And Selling At The Same Time
Dated: June 23 2018
Your Ultimate Guide to Buying and Selling a House In Roseville at the Same Time
Maybe you received a job offer in a distant city, you want to move closer to family, or you simply want to downsize, there are many reasons why you may want to sell your current home and move into a new one. However, this process can be complex and you must rely on buyers and sellers to help make it happen. Let’s take a closer look at how you can buy and sell your house at the same time and not get trapped in an overwhelming mess.
Carefully Evaluate the Real Estate Market
Many home experts agree that the first thing you must do when buying and selling a home is to carefully evaluate the current housing market. Understanding the real estate market helps you plan and strategize your home buying and selling processes. It also helps you determine the right timing of each move and can prevent making a poor decision based on impulse or feeling desperate. When evaluating the current housing market, you must understand who it is catered toward — buyers or sellers. Each type of market will determine a different strategy needed for buying and selling your home.
A buyer’s market is when there are more houses on the market than there are buyers searching for a home. This means that the buyers have much negotiating power and are more likely to have a low offer accepted by desperate sellers. It also means that your home is more likely to sit on the market, delaying your own home-buying experience.
In a seller’s market, there are more potential buyer’s than there is inventory. In this market, many sellers may receive multiple offers and buyers will have to increase their offers to secure the home. In a seller’s market, you want to appear like a safe choice and want few contingencies such as waiting for your own home to sell.
Should I Sell My House First?
When you are attempting to buy and sell a house at the same time, many real estate professionals recommend you place your own home on the market before purchasing a home. This will save you a substantial amount of money and you won’t need to worry about paying two mortgages if your first home does not sell. If you have a high debt-to-income ratio, you may not be approved to purchase another home or you may not qualify for the size of a house that you desire.
Additionally, if you and several other homebuyers place an offer on the same home, the sellers are likely to accept the offer with the fewest contingencies and concerns. Even if your home is not sold, it is wise to place your current house on the market before placing an offer on another one. This one act helps you appear as a serious and reliable buyer. Sellers will look for buyers who are less likely to pull out of the deal and put them in a difficult bind.
Options for Moving Forward
If you are pressed for time or money and you need to purchase and sell your home quickly, options are available to make this process happen. Let’s look at four options you may consider to help you purchase a home before your current property is sold.
1. Consider a Sale Contingency - One of the most common options for buying and selling your home is to include a sale contingency in the offer on a new home. This contingency simply says that you will not proceed with the purchase until you have sold your current home. You can work with your real estate agent to work through the specific details in your offer.
2. Choose an Extended Closing- DateIf you have yet to sell your current home but have confidence that it will sell, you may consider extending the closing date of the home you are purchasing. This will give you additional time to sell your home before you officially close on the new property. This is only wise to do if you feel confident your current home will sell in that period of time. However, it can also be a drawback if the sellers of the home are looking to sell and move out quickly.
3. Consider a Home Equity Line of Credit- A home equity line of credit, also known as HELOC, is essentially another mortgage but you can access the money and use it to pay for a down payment on a new home. HELOC is also often used for remodeling and large home renovation projects. To qualify for this line of credit, you must meet certain specifications. In most circumstances, you must have a credit score of 620 or higher, low debt-to-income ratio, and your home value must be at least 10% more than you owe on the house.
4. Apply for a Bridge Loan- A bridge loan is designed to help individuals who are buying and selling their home at the same time. A bridge loan is a type of loan that will help cover the cost of a down payment while selling the current home. By choosing a bridge loan, you don’t need to worry about placing a contingency to sell in your home offer, which makes you more appealing to the buyer. However, these loans come with a cost. They can include high fees and interest rates and not all lenders offer them.
Why Working with an Experienced Real Estate Agent is Best
If you are attempting to buy and sell a home at the same time, you need professional help to guide you throughout the process and ensure each of these large transactions run smoothly. Experienced real estate agents can also help answer your questions about the current housing market and can help you price your home correctly so it sells at a price you deserve.
If you are in the position where you may need to buy and sell a home at the same time, do not delay. Reach out to one of the trained real estate agents at Roger’s Real Estate to help you throughout the entire buying and selling processes. They can make your entire real estate experience much more enjoyable and easier to navigate so you can focus on getting in to your new home.
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