16 Apr 3 Methods to Selling and Buying a Home at the Same Time
Selling a house is time-consuming. Buying a home is time-consuming. How can you possibly do both at the same time? Never fear, there is a way. Three ways in fact! I’ll outline the three ways and also explain the average timeline for the most common method of buying and selling simultaneously.
Buying Without Selling
This is by far the rarest, but easiest, way to go. If you can qualify with a mortgage provider to buy a home without selling your current home, it will give you a huge advantage in the market. This method is preferred in multiple offer situations and allows you to take your time selling your home. However, there are a couple of drawbacks. First, your debt to income ratio must be extremely low in order to qualify for another mortgage. Secondly, you may need to pay two house payments for a little while. These can be avoided if you own your current home free and clear.
A contingent offer means the sale of the home can be finalized so long as certain criteria are met. This includes home inspections and appraisals. Another common situation is the buyer is contingent on the sale of their home. Meaning they can only purchase another home if their current home successfully sells. It’s a risk for the seller because they are agreeing to let someone out of a purchase agreement based on something completely out of their control.
Contingent offers are market driven. The more homes on the market, the more competition between sellers. In this case, a contingent offer is more readily accepted. If there is low inventory on the market, there will be more competition between buyers. More buyers often mean multiple offer situations. Sellers will rarely accept a contingent offer because it’s almost certain a better offer will come.
Selling Then Buying
Selling your home first then going on to buy is the most common method, but can be the most stressful. First, you should look at the houses on the market. If you like at least 20% of the homes, you will most likely find a home when you are ready to buy. The next step is listing your home. You can either wait to buy until your home has an offer or has successfully closed. Buying a home before your current home has closed can be risky but is also beneficial to your timeline. It’s common for sellers to wait until their home has sold before moving on to buy.
Timing and the Double Move
There are a few misconceptions that often scare clients. Many fear their home will sell before they find a home to buy. It takes 45-60 days after receiving an offer for the homes to successfully close. This is usually enough time to find a house and make an offer. The other big fear is having to find temporary housing. The dreaded “double move”. First moving to temporary housing and then to your new home isn’t as bad as many people fear. Many places offer month to month or 6 months leases. If you’re lucky, family or good friends will offer a place to stay to ease costs. The double move also means you are already packed and allows the flexibility to not be rushed finding your new home.
Selling and buying at the same time is typical in Real Estate. Because of this, a knowledgeable and experienced Realtor will guide you through the process with relative ease. It is something we have done many times before. The process may seem complex with so many time-sensitive moving parts, but the system has succeeded for innumerable people before.
As always, I am here to help. Read some of my other posts to prepare for selling and buying a home simultaneously.
If you have any questions, please let me know, I’m always happy to help. You can give me a call at 612-889-6496 or send an email to [email protected].
Get a Virtual Price Opinion from Sheryl