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
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.