Top Concerns For Selling and Buying a Home Simultaneously
It’s time to sell your home. At this point, it’s time to figure out which route to take to sell your home. At the same time, you must begin the process of finding a new place to live.
Selling and buying a home at the same time is not an easy journey. Even just one of these processes can be enough to make someone want to pull their hair out – much less going through both simultaneously.
When dealing with both selling and buying a home, there are a few major concerns that come to play. Although each situation may vary, there are a number of challenges that are similar across the board.
1. How Much You Can Afford
When purchasing a new home, it’s a good idea to have a basic understanding of how much you can afford. It’s an even better idea to get pre-qualified with a mortgage lender.
That’s why many people decide to sell their home before they purchase a new one. They’re able to see the exact number in their bank account. This gives them a better understanding of where to go from there. However, there are often caveats to this method (which we will explore later) and potential tax implications.
One of those caveats is that if you decide to buy a new home before selling the old one, you run the risk of overspending. This is especially true if you don’t get as much profit from the sale as you hoped. On the other hand, if you keep your budget too conservative, you could miss out on a bigger or better home and regret it later on.
In a traditional home sale, you’re relying on the housing market and your listing agent to get the home sold on your timeline. In a perfect world, you’d be able to sell the home and move out the same week that you receive the keys to the new home. However, because the market is unpredictable, this isn’t always the best option.
Whether the old home needs work or you need a flexible timeline to get the home sold, consider speaking to a local investor. Because they won’t be moving into the home, their timeline is often less restricted and flexibility is a major benefit to that.
Selling Before Finding a New Home
What if you decide to sell your home first? As we mentioned earlier, this would give you a better understanding of what you’re able to afford and help you avoid the risk of paying two mortgages at once (something we’ll explore later on).
In today’s housing market, selling quickly is possible (although this also depends on the current state your home is in). It’s not uncommon for homeowners to put their home on the market and sell just hours later. Yet, while it may initially feel like a relief to get the old home off your hands, you may now be out of a place to live.
If you don’t match the timing up just right, you could be left without a home for a while. Let’s say you sell your home in April but you haven’t found a new house yet. Now what? You may either be stuck with renting short-term or crashing at your friend or family’s home while you search for a new house – neither of which are ideal options.
Paying Double Mortgages
Another concern is the possibility of paying two mortgages at once. In a housing market as intense as Seattle’s, this is out of the question for a large portion of homeowners. With that said, if you find the perfect home within your price range, you may not want to pass it up. So, what can you do?
First of all, research the market and find out where it currently stands. In 2018, Seattle’s housing market is by far a seller’s market.This means sellers generally have the upper hand. In this situation, buying a home before selling may be a good idea.
Talk to an agent or a real estate investor to find out how much your home is worth. Get their opinion on how quickly it could sell in its current condition. If work needs to be done, consider whether or not you’re able to handle and/or afford the necessary inspections and repairs.
Once you have a decent idea of how quickly your home could sell, it’s safe to begin the house hunting process. Remember, however, that no matter what your agent tells you, there’s always going to be risk associated with buying a home before selling your old one – one that could result in double mortgage payments.
If you discover it’s too risky or you’re not able to handle the repairs your home needs, consider speaking to a real estate investor about getting a cash offer on your home. Tell them about your unique circumstance and request a flexible close. Not only will you know up front how much you may get for your home, but you’ll also be able to time everything to work out just right for you.