Selling a House and Buying a House at the Same Time
Today we’re talking about buying and selling at the same time, whether you’re looking to move into a bigger home or downsize, it can be a complicated process. And there is more than one way to get you to the end goal.
We’ll walk you through a few different ways to buy and sell in tandem. Our priority is always to make things as simple as possible for our clients taking into consideration their financial situation, timeline, and priorities. Each of these options has it’s pros and cons so we’ll go through each, touching on a few key points to keep in mind.
Option 1 - Buy a new house and list your previous home after moving out
- This is probably the easiest way to go because you can find a house, move out of your existing house and leave it vacant for marketing. No rushing around getting the house ready or keeping the house in pristine condition. This can be especially hard if you have animals and kids.
- You could have to invest time and money in staging. It really depends on what type of furniture and decor you have in the house already. You might need to bring in some extra stuff for the house to show the best it can.
- There is risk involved because you don’t know how long your house will sit on the market or how much you will net from the house. You could end up having two mortgages for a while.
Option 2 - List your current home, once under contract, look for your new home
- Have a backup plan in case you can’t find the home you want. If you sell your home and you can’t find a new one, you might need to go rent a short-term rental or a long-term rental depending on how long you think you will need to find the new place. In the tighter market when inventory was super low and it was hard to secure a house, sellers were hesitant to sell their home first in fear that they might not find something they like.
- It is usually best to try to negotiate a leaseback so that you can close on your home and then lease it back from the buyer for up to 90 days so that you can find your next house.
- Contingent contracts are back. The market has evened out and sellers are much more prone to take a contingent contract based on the sale of your existing home.
- In this scenario, you don’t have to worry about holding multiple properties
Option 3 - Use a buy-before-you-sell program
- There are some added fees to using these types of programs but it varies depending on the program
- These programs prevent you from having to qualify for 2 mortgages.
- They typically have you lease your new property from the company and close on it once your previous property sells
- Not a great option for all properties because of market changes. It was very popular in the very strong market because houses were selling in multiple offers and quickly. Not as popular in a stable market because there are so many other options.
- Something to keep in mind is If the property doesn’t sell in a certain time on the market, the house is purchased at a lesser, agreed-upon price.
Option 4 - Buy new construction
- Builder timelines are NOT always accurate. With all of the supply chain issues and labor shortages, it has been hard for builders to keep their timelines.
- You’re often required to have your current house sold by a certain time or qualify for two mortgages, if you don’t comply your contract could be jeopardized.
- Be prepared with a backup option or even just stay ahead and sell and make your move a few months in advance and coordinate a short-term rental.
None of these options are simple, we get lots of questions when talking with clients so we’re going to answer some of the most common questions that we get.
- What is a leaseback
- These can last anywhere from a few days to up to 90 days. The buyer becomes the landlord and there is a deposit just like a typical lease
- What if I want to use proceeds from my sell
- Selling before you buy could be your best option. It can take a lot of orchestrating to have a smooth process. However, be sure to chat with your preferred lender you could have other options such as recasting
- How do I find a short term rental option
- Airbnb and HomeAway are great places to look for a short term rental. We have a list of apartments that offer shorter lease terms (3-6 months), could you stay with friends/family. Sell in advance and choose a longer term lease. Check lease agreement for month to month terms.
- Do I have to stage my house to sell it?
- Of course not, you don’t HAVE to do anything. That said, we do recommend it. The importance varies per house, area, market, and price point. We talk over all of these details and create a plan together that works best for you.
- What is a contingent offer?
- A contingent offer in real estate is an offer to purchase a property that is dependent on certain conditions being met, such as the sale of the buyer's current property. Keep in mind that another offer could come in and you could be forced to consider removing your contingency and moving forward with the purchase or losing the property to another buyer.
- Are buy before you sell options a good idea in today's market?
- They can be and it’s truly hard to say in a general sense. It's very specific to each buyer and property. A few things to keep in mind…You could leave money on the table, it can be stressful if your home isn’t selling, these companies typically become a part of the whole process even when it comes to deciding on a list price.
If you would like more information when it comes to buying and selling a home, go listen to episodes 15 and 16 where we cover the processes in more detail. If you have more questions about buying and/or selling and want to chat, please reach out! We cover Austin and surrounding areas but also have an extensive agent referral network and can connect you with an agent wherever you are.
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