How To Guide: Sell Your Home & Buy a New One at the Same Time
Unless you’re moving from a rental, a family member’s home, or a property you intend to rent out (or use as a second home), you’re likely in a position where you have to sell your home and buy a new home at the same time. It’s a prospect that can feel daunting for even those who have done this before. After all, it can seem like a “chicken or the egg” scenario: Do you focus on the sale so you know how much money you’ll get, or do you focus on finding a new home so you’ll have a place to live lined up once your home sells?
While the answers depend on many factors unique to you and your home, we have seen it all when it comes to this situation. Here are the ten things you'll want to keep in mind when you’re a buyer and seller at the same time.
Focus on the Home You're Selling First
Once you’ve made the decision to sell your home, it’s tempting to jump to the next step. For one, a new home represents a fresh beginning. Searching for a new home also eases the anxiety that comes with the uncertainty of selling your current place. The problem? If you’re not devoting the same care and attention to the sale, you might not do the things you need to do to get the most money for your home or to sell it on the timeline you’d like. Half-hearted decluttering (a must for staging), procrastinating on the repairs your realtor suggests and other missteps that happen when your heart is in the new home search can cost you in the long run.
Find a New Home
Conversely, there are homeowners who are so focused on doing everything they can to sell their home for the highest price that they’ll avoid even thinking about finding their next home. While potentially getting more money for your home isn’t a downside, the true issue is where you’ll live after the sale. A rental that suits your household might not be immediately available, depending on your market. Or, you might not be able to find a short-term rental that works with your timeline for finding a new home.
Find an Agent
If you’re moving a few miles away, sticking with a local real estate agent is perfectly fine. If you’re moving further than a neighboring community or city you’ll need someone who is an expert in that particular market. Your attention is going to be divided just due to the simultaneous nature of your sale and purchase. An agent who really knows the neighborhoods and how quickly the market is moving means you’ll have the data you need to find the home you want (without you having to do hours upon hours of research).
We have relationships with agents all over the country so if you're looking for a recommendation, let us know!
Consider Renting a Storage Unit
On the surface, it makes sense: Why go through the time and expense of moving your stuff to a storage unit, only to move it again to your new place? In this case, though, the time and money you save pale in comparison to the hassle. When you have to declutter for staging, begin prepping for your eventual move and still need your home to look presentable in the process, having a storage unit takes a lot of stress out of the equation. Just remember that it’s a temporary home for your stuff — make sure you’re taking a quick moment to organize items in boxes and label, label, label.
Always Have a Plan B (and Plan C)
Even if you’ve devoted the right attention to both the sale and the search for your next place, the market is the wild card. You might be surprised with multiple offers within days of your listing hitting the market, a buyer who has all their paperwork in order and a transaction that doesn’t hit any snags whatsoever. While that’s an ideal situation for most sellers, you need to be prepared for your plans not going as expected. You may want to have a plan to move in with family or have a short-term rental as a backup.
Learn About Bridge Loans
These short-term loans can help you financially during the transition between your old and new homes. For example, a bridge loan might be used to buy the new place while your home is still on the market, or if you’re put in a situation to suddenly move (like a job relocation). Because they’re short-term loans, bridge loans often have higher interest rates and quicker repayment periods. Depending on your situation, though, it might be an option to consider.
There is another option called a loan recast. You would have to qualify for the loans of both your current home and new home. But, once your current home sells, your lender will re-amortize the loan on your new home. Your interest rate stays the same with no refinance charges. It's a great way to get your offer accepted on the new home without any contingency of selling your current home.
Think Through Home Sale Contingencies
A home sale contingency is a clause in your contract to buy a home or sell your home that gives you a certain amount of time to sell your home before proceeding with the transaction on the buy side. It seems like just the thing to give you peace of mind when you’re buying and selling at the same time. However, these contingencies can turn off sellers because they don't know when or if your current home will sell. In a hot seller's market when you're competing against other buyers, sellers want more reassurance and are less likely to accept a contingent offer. When you’re the buyer, having a home sale contingency could be countered with a kick-out clause. This means that if the seller can continue to market the home and accept a better offer if it comes along.
Face Your Emotions
Once selling your home becomes a reality, you might experience strong emotions about your home. Even if you were excited to sell in the first place, seeing empty rooms, packing boxes and opening your house to visits by potential buyers can make you feel suddenly sentimental about leaving. It’s less about the home itself, but instead what it represents — the past. Don’t be afraid to speak up to your realtor if you start to feel pangs of regret or sadness. They’ve likely seen this happen in nearly every sale and can help shift your focus to your goals.
The process of selling and buying at the same time is enough to be a full-time job…yet you may have a full-time job already. Add in a family, a major work project, or a life transition (like getting married or divorced) and you can quickly feel like there just aren’t enough hours in the day to do what you need to do. When faced with overwhelm, some of us overperform (and never sleep) and others shut down (and avoid everything). Create a plan for each phase of the moving process and ask for help when you need it. Take some time for rest and fun in the midst of what can sometimes feel like chaos. Remember, it's always messy in the middle. Keep moving forward and you will be glad to see the end result.
Keep Your Goals In Mind
From the moment you decided it was time to sell to the date of your first open house, the process of selling your home can occupy a lot of mental space. (It’s why some homeowners fall for the “Silicon Valley way” of selling their home, which can often be a mistake.)
In the end, buying and selling your home at the same time is like training for the Olympics — a successful outcome involves strategy and the right frame of mind. Consider your realtor your coach in this metaphor. They’ll keep you motivated, prepare you for what to expect and offer support whenever you face a challenge. But unlike the Olympics, achieving your goal is basically a sure thing.
Check out our video below for more on how to buy and sell at the same time.