The recent real estate market has been challenging for buying and selling a home. On the one hand, you can sell your home and get an enormous amount of money over the asking price. However, on the other hand, you can also fail to get a new home due to the current inventory shortage. A study by Homelight reveals that 45 percent of real estate agents are seeing buyers put their plans to purchase a home on pause for six to 12 months. So, if you plan to sell and buy a house at the same time – whether you need to buy and sell in Florida or elsewhere in the U.S. – you will have to be very meticulous in your approach to ensure that your transition is seamless. Keep reading to learn some tips on buying and selling a home simultaneously.
Study Your Local Market And The Market You Want To Move To
Selling and buying a home at the same time can be pretty challenging. But this shouldn’t deter you from trying, even in an unpredictable market like the current one. Doing your research is an excellent way to navigate the current real estate climate and ensure that you don’t have surprises during the process. Study your current local real estate market and the one you want to move into. You may reside in a real estate market that is a buyer’s market and move to one that is a seller’s market. Or vice versa. Knowing the market will allow you to understand how to approach the buying and selling process. Ideally, it is best to sell before buying so you won’t have to deal with the challenge of carrying two mortgages. However, if the new neighborhood you want to move to has minimal inventory and your current community has homes moving off the market quickly, buying your home first may be a better option. Ultimately, your research will dictate how you should proceed.
Get Pre-Approved For A New Home
After researching, you should get pre-approval for a new home. You’ll want a ballpark estimate of how much house you can afford. This will also help narrow your research further when you know this information.
Discover How Much Your Current House Is Worth
Do you know the value of your home? Getting this information as soon as possible is helpful. Many online home valuation tools can help you figure out what your home is worth. Websites such as Homelight, Realtor.com, Zillow, and more offer these tools. But suppose you want to get a more accurate picture of the current value of your home. In that case, it is a good idea to work with a real estate agent in your local area to acquire a comparative market analysis (CMA) which will give you an idea of how much homes in your local area recently sold for. This will help you price your house competitively to sell, keeping it from sitting on the market too long and keeping you from losing money from the sale of your home.
Acquire A Top-Rated Real Estate Agent In Your Area
When you are selling and buying a home, a top-rated agent in your local area can be a great resource. They know much about the local market because they represent buyers and sellers. So, you don’t have to go at it alone when you decide to buy and sell. The expertise of a top-rated agent will allow you to make this process as smooth and stress-free as possible, even in challenging, unpredictable markets.
Get Your Home Ready To Sell
Once you obtain a top-rated real estate agent, one of the things that they will do is offer great advice on how to get your house ready to sell. They know first-hand what buyers want to see. So, they will provide guidance on how to stage your home. Keep in mind that you don’t have to do the staging yourself. You can seek out a top-rated staging company in your local area. Or you can utilize the resources of your real estate agent, who knows many house staging professionals, photographers, and home improvement specialists who can help you get your house in top shape.
Determine How Much Of A Down Payment You Will Provide
An essential part of buying a new home is how much of a down payment you can make. So, as you prepare your house to show, take time to find out how much you can put on a down payment. Here are some tools for getting a down payment for your new home.
Bridge Loan
A bridge loan is a loan that you can take out until you sell your home. So, if you are looking for a new place, you can get such a loan using your current home as collateral. You can use it to pay off your existing mortgage and use the rest for a down payment on a new home. This is a very high-risk loan, and the interest rates can be pretty high.
HELOC
HELOC stands for a home equity line of credit. This type of loan is similar to a bridge loan in that you can use it toward the down payment on your new home. However, it has cheaper interest rates, and you can use it on anything you want it for.
Retirement Loans
While you should use your 401(K) retirement plans for retirement, you may need some of the funds for a new home. Remember that this loan will create an early withdrawal penalty of 10 percent for removing it before 59 and ½. Additionally, before you make such a decision, it may be a good idea to speak with your financial advisors.
Personal Resources
Another way to increase your down payment on your new home is to gather money from your resources. For example, will your parents be helping you with your down payment? Have you recently gotten an inheritance? Will you be using money from savings or investments? Do you have substantial cash on hand to purchase your home entirely with cash? Your resources can be beneficial for increasing the amount of down payment you can put on a house.
Start Your Home Search
Once you have taken the time to determine where you want to live and know how much you can afford for a new home, it’s now time to focus on the specifics. What neighborhood will your home be located in? What amenities will it provide? Is it in a specific school district that is ideal for your children? What will property taxes be? Take time to think about the home you want in terms of the layout, the type of house, your neighbors, and more. Remember that you will invest substantial time and money into your new place. Therefore, you want it to suit most of your needs.
Additionally, try to think long-term. Will this be yours forever home? Or will this be a home you need only until you retire? Take some time with this part of the process and get to the heart of why you are moving so you won’t make your decision haphazardly.
A Few More Pointers
While all of these are critical steps to making buying a new home and selling your old one a success, here are a couple more essential factors to consider to make the process seamless.
Make An Offer Contingent On The Sale Of Your Current Home
Some homeowners may not have to offer a contingency because they can afford to carry two mortgages if they have to do so. However, if the purchase of your new home depends on the sale of the old one, it is a good idea to make a contingency offer when buying a new home. Home sellers may not take your contingency offer seriously because you may not sell your home promptly. But doing this protects you from being locked into a contract that can result in legal action. It can also prevent you from losing your deposit.
Extend The Closing On A Home Until You Sell Your Current One
Selling your home may not proceed as quickly as buying. So if you happen to find the perfect home and need to sell yours before purchasing a new one, extending the closing past the typical 30 to the 45-day range is a good idea.
