How to Buy and Sell at the Same Time

When you’re ready to sell your home, the next step is finding a new one to move into. This bonus article is a must-read in the Love Selling Your Home: Minimize Your Stress, Maximize Your Profit series. Let’s walk through how to buy and sell at the same time without losing your mind!

You’re ready to trade up to a new home, and that means facing the homeowner’s dilemma:

Do you SELL your current home first and use the proceeds to buy a new one? Or Do you BUY your new home first and hope your current home sells quickly?

It’s a tricky dance since you don’t want to end up with two mortgages for too long, and you also don’t want to sell without having a place to go next! Here’s how to avoid that Catch-22:

Get Ready and Plan Ahead

Timing is everything. You want to put yourself in the best possible position no matter what, so start with some major pre-planning, no matter which option you choose. I tell my clients—when you’re buying and selling at the same time, reach out to me a few months or even a year before you are ready to move!

1. Get your home ready to sell:
   • Tackle some home improvement projects so your home looks welcoming to prospective buyers. Even if you plan to buy first, get this done so you can quickly list your current home on the market.
2. Scope out your current home’s competition:
   • Take a look at homes you’ll be competing with to determine market conditions and set a competitive price. You may decide to wait if the market is slow, or maybe your home can be priced more aggressively.
3. Get pre-approved for a mortgage:
   • This is a must. Know how much you can afford and be ready to move forward on buying a new home if your current one sells quickly. Sellers will view you more favorably and may take a lower offer than one contingent on financing.
4. Examine financing options:
   • Consider a bridge loan, a short-term loan that “bridges” the gap between buying your new home and selling your current one. This can make you look strong in your offer for your new home.
5. Be an efficient and smart “shopper”:
   • Don’t waste time looking at homes you can’t afford or don’t meet your requirements. Narrow down your search to those you’d seriously consider buying.
6. Add contingency clauses:
   • Review the pros and cons of contingency clauses. You can agree to sell your current home contingent on purchasing your new one and/or agree to buy your new home contingent on selling your current home. Most sellers and buyers prefer contingency-free offers, though!

Sell Before You Buy

One of the transactions has to happen first, even if it’s only for a day or two. Let’s explore the pros and cons of putting your home on the market first.

Pros:

• You won’t feel pressured to accept a below-market offer to meet a purchase deadline.
• Once your home is sold, you can buy your next one with no contingencies.
• You’ll have equity immediately available for the purchase of a new home.
• You know exactly how much money you have to put into your next home.

Cons:

• You may need to find interim housing – either renting back your old home or finding a place to stay between homes.
• More pressure to buy can lead to rash decisions.
• Living in your home while prepping it for sale and keeping it clean for showings can be inconvenient.

Buy Before You Sell

In a competitive market favoring sellers, it can make sense to buy first. If you go this route, ensure you are approved to do so.

Pros:

• You can search for a new home without pressure.
• No need to find interim housing.
• Move out of your current home before it’s on the market, which is especially helpful for those with kids and pets.

Cons:

• Risk of having double mortgage payments. Not everyone can get approved for another mortgage while still owning a home.
• You don’t know the exact price your current home will sell for, leading to uncertainty about how much you can spend on your new home.

Communicate and Coordinate

Whatever option you choose, you still need to coordinate two major transactions in a short period of time. Don’t feel like you need to figure all this out on your own. That’s what I’m here for!

Reach out to me well before you want to move so we can discuss your options and create the best plan for you. The best way to go about this might not be the same way your friend, neighbor, or coworker has done it. We’ll focus on your goals and financial situation to create a solid plan that will get you from where you are to where you want to go next!

I’m looking forward to helping you or anyone you know buy and sell with ease.