Handle Buying and Selling Like a Pro
Unless you’re buying a home for the first time, the process of purchasing a home can be daunting. Not only do you have to jump through all of the hoops involved in purchasing a home, but you have an entirely different checklist to get through in selling the home that you already own.
The timing of buying and selling can be difficult as well. While it may be ideal to buy a home and then put your previous house on the market, this can be unrealistic. Sellers might not take you seriously if your home isn’t at least on the market, and you’ll have the added expense of paying two mortgages if you buy another home before your previous one has sold. Likewise, selling your home before having another house to move into can leave you adrift for weeks or months, and it can put too much pressure on you to buy a house. The best way to go about buying and selling is to do both simultaneously. Here are some tips to help you juggle buying and selling like a pro.
1. Know Your Market
It’s important to understand the housing market in your area before you put your home on the market or start seriously searching for a new one. Is the market favoring buyers or sellers, and how will this affect your selling and purchasing power?
You won’t be able to make the best plan of action unless you understand who’s holding the power in the market.
As part of understanding your market, you’ll want to hire an appraiser to help you give a fair price on your old home. When purchasing and selling at the same time, it’s best to get your house sold—fast. The faster it sells, the less time you spend paying two mortgages. So, make sure you don’t overprice your old home.
2. Plan Ahead
There are risks and rewards depending on whether you end up buying or selling first. It’s important to consider which option will work out better for you, then plan accordingly.
Selling first will make it easier to get a mortgage. However, it also means you’ll need to find a temporary place to live. When you buy first, your debt-to-income ratio becomes skewed, which can make it harder to get a mortgage. Plus, you’ll be paying two mortgages at the same time. Some lenders may be able to help you qualify even with the existing mortgage with unique loan products. Contact your Del Rey Urban agent for a referral. Contact an agent today by clicking HERE.
It’s a lot to consider. Don’t simply ask what will make your move as easy as possible. Instead, ask whether or not you can handle two mortgages. Or, what if your home sells for less than its listing? The more you plan ahead, the easier it will be to handle whatever gets thrown your way.
3. Don’t Depend on Timing
Even if you plan out your buying and selling perfectly, you can’t depend on everything to go smoothly. There are too many external circumstances to have complete confidence in any plan you make. While you make your decisions for buying and selling, you’ll have to remember that there are other people involved in the process, such as the person selling you your next home or the buyer of your previous home.
Even the best plans can get frustrated by outside factors. Keep this in mind, and be flexible when you need to be.
4. Know Your Financial Solutions
There are several options for financial relief when buying and selling. If you sell first, your extra costs are limited to rental between homes and storage space for your personal items. This can be alleviated through a rent-back agreement, where you negotiate with the lenders and buyers so that you can stay on the property for 60-90 days.
If you buy first, you’ll want to talk to one of your Del Rey Urban agents about different options for dealing with the added financial burdens and risks. One common solution is contract contingency, which makes the purchase of your new home dependent on the sale of your old home. Another is the use of a bridge loan, which you can use to purchase a second home, then pay off with the money made in the successful sale of your first home.
5. Don’t Rush
If your first home has already sold, don’t let fear push you into making a bad decision. Consider planning on a short-term rental so that you don’t feel rushed to purchase. Don’t compromise on things that are important to you just because you feel like you need a home right now. Likewise, don’t accept a bid that’s too low just because you’re eager to get your house off the market. Having a temporary home set will keep you from feeling too much urgency in buying and selling.