Do you need to buy and sell at the same time and you’re feeling confused by the juggling act that comes with it? You definitely aren’t alone!
I find that my clients have to do some mental gymnastics to figure out what their best plan of attack is when they have a home to sell and buy at the same time. Buying a home when you’re still living in your current one can create a domino effect and when one of the dominoes tips over everything can fall apart, so I’m here to walk you through the process and make sure all of the pieces fall into place for you.
Option #1 – Sale Of Buyers Home Condition
Most Real Estate transactions include conditions, also known as subjects or contingencies. In this case, you would put in an offer on a home – but you would only be obligated to buy it if someone buys your current property. So what that means is, if your buyer falls through, then you reserve the right to back out of your purchase contract as well.
The drawback to this is that it doesn’t really work in a competitive market. Written into this condition is the ability for the seller to still market and show their property so that they aren’t assuming any risk, so if you’re pending with a Sale of Buyers home condition there is a chance that someone else could come along and buy the property instead
Option #2 – Own Both Homes Temporarily
If you can afford to carry two mortgages, this could work for you. In this scenario, you would get a mortgage on the new home, and wait to move out of your current home until you’re ready.
I’ve been seeing a lot of vacant properties lately where sellers have chosen this option.
This process is helpful when your new home needs major renovations and you want to stay put while they’re being completed.
This isn’t necessarily right for everyone. You’d need to be approved for a second mortgage, which is entirely up to the lender. You’d have to pay both mortgages simultaneously and so you can’t apply the funds from the sale of the first home towards the purchase of the second – which means you’d need to come up with the down payment out of pocket.
Option #3 – Sell First, Buy Second
Another option is to sell your home first and have a back up plan, in case you don’t find one in time, whether that means renting a place temporarily or staying with a family member.
The drawback here is obvious – you’re moving twice. The benefit is that you have more control in getting the home you want, and not be bumped out of it by another buyer overriding your sale of buyers home condition. You also have the ability to take your time shopping for a new home without having to make any rash decisions.
What’s Right For You?
Again, buying a home when you have a home to sell can be tricky! I’ve seen transactions where multiple families are buying and selling contingently, with a sale of buyers home condition so that string of dominoes is long!
At the end of the day, orchestrating a transaction like this is an art form and you need a great real estate agent who can guide you through that process.
If you have questions about anything I covered today, or if you’re thinking about making a move, feel free to message me here or fire me a text. I’m always happy to help!