Today I want to go into detail about how to buy and sell a home at the same time in today’s current market.
To begin, you shouldn’t try to purchase a home before selling your current house. The first reason for this is that you might not even qualify for that home, so this might not be an option to begin with. And even if you did, paying two mortgages at once is very risky, especially if you’re not sure how long it will be before you sell your first home. Our team’s days on market average less than one month, but we do have outliers and can’t always guarantee to sell a home in a set number of days.
Returning to the double-mortgage dilemma, it’s possible that you’d be able to qualify for a second mortgage, but the mortgage on your first home will impact your purchasing power for the second home.
Additionally, we always preach leverage. In a competitive market, it’s hard to leverage yourself to other sellers when you have a house to sell of your own. Sellers will be less inclined to work with you on terms if they have to work around your sale as well.
Murphy’s Law (the idea that if something can go wrong, it will) is also a potential issue in a double-transaction scenario. If you’re paying two mortgages and one of the properties is under distress, you’ll have to come up with cash to remedy that situation, which will be difficult for most.
Now that we’ve discussed reasons why you shouldn’t buy a home before you sell your current one, let’s discuss what you should do to make a double transaction go smoothly.
1. Consult with a real estate professional. Lay all your cards on the table, come up with a strategy based on your goals.
2. Make sure you schedule out when you will buy and sell. Having a clear plan with deadlines in place will help you carry out your transactions in stages, rather than trying to bite off more than you can chew.
3. Hire a home inspector. Having a preemptive inspection done will mitigate any potential issues that could cause problems down the line by allowing you to fix those issues before the buyer spots them.
4. Meet with a stager. A good stager (like ours) will walk through your home, creating a room-by-room report of what you can do to make each room shine and add value to your home. Spending time positioning your home is great for attracting more buyers, which will allow you to sell quicker and for more money.
5. Price your home correctly. Many sellers have the inclination to try to test the market by setting a price higher than the market value. Rather than getting the seller more money, this will only make the home sit on the market longer than normal, which will reduce the number of people who want to buy it, causing the seller to eventually reduce the price, and ultimately netting them less than they would have if they’d just priced it fairly to begin with. A real estate professional’s advice about pricing will prove invaluable to sellers who are interested in getting the most money they can from their home.
6. Sell your house. When your agent puts your home on the market, make sure to collect any feedback you get about your home and to keep it clean and presentable until it goes under contract.
7. Once you get traction on the market, that’s when you can start looking for your next home. If you don’t find a new home by the time your current house is ready to transfer ownership, have a contingency plan. You might need to look into a short-term rental, or else ask to stay with friends or family until you can lock in a new house.
If you have any questions about this topic, don’t hesitate to reach out to us. Additionally, if you have ideas for future topics you’d like us to discuss, let us know. We’d be happy to cover them for you.