3 Ways to Buy and Sell a House at The Same Time
How to buy and sell at the same time in this crazy competitive market.
Today I'm going to share with you three different strategies you can use today to buy and sell at the same time.
Let's start with the problem.
The problem is you own a home right now and you want to buy a new home and you can't have two mortgages at the same time, if you're like most of us. It throws your debt to income ratios out of whack and it won't fly with the lender. How do you sell that home and move into the next home? Here's three different ways you can do it and at the end, I'll share with you the way that we always coach our clients to do it right now in this super competitive market that we're finding ourselves in.
1. List your home and move somewhere else
The first way you can do it is you can list your home and move somewhere else until you find the new home. That means you just put your home on the market right now. When the home sells, you're going to move out and you're going to go live with family, maybe go get a short term rental or whatever else you want to do until you have time to go find the new property. The pros of this is it's very easy to execute. You can get your home on the market quickly. You don't really have to be stressed out about finding another home. You don't have to be a contingent buyer, but the cons of it are is that you have to move twice, which is not super fun for most people and you have to find a short term rental, which can be very, very difficult. One of the mistakes I see people make frequently with this strategy is they go rent for six to 12 months and they no longer are getting the benefit of the appreciation of their old home while the rest of the market keeps going up. So they're kind of losing their purchase power as they're sitting there on the sidelines as a renter. So that's strategy number one.
2. Wait to list until you find a home
Strategy number two, wait to list until you find a home. This is called a contingent buyer in real estate and this traditionally is a very common way to buy and sell at the same time. It is however problematic and challenging in our market right now simply because if there's eight to 10 offers on a home and one of those offers is contingent, generally that offer is going to get pushed aside simply because the seller doesn't want to deal with you having to sell your home. It's an additional risk. It takes additional time. It's just a big unknown and so if they don't have to inherit that risk and that liability, they're just not going to do it. They're going to pick a non-contingent offer all day long. There are markets where this works while at, it's just not our market right now. So that's strategy number two.
3. List your home right now
The third and final strategy I want to share with you is, you can list your home right now and you can go find a home as soon as your home goes under contract. That is what I would say is the best strategy right now in this competitive market. It allows you to have a lot more purchase power when you are offering on a home simply because the risk of your home selling is already mostly mitigated. Your home's under contract. Hopefully it's through the inspection. At that point, the seller's risk on the home you're offering on is much, much lower.
What we do
What we will do for our clients and what I always suggest doing is negotiating what we call a rent back in real estate. That means after you sell your home you can rent it back for one week, two weeks, three weeks while you're waiting to move into the next home or even have a little bit of overlap so you don't end up homeless and you have time to make that transition on your terms and at your pace. So I hope that that's helpful.
There's two other things, I just want to make sure that you're aware of and these are common mistakes I see sellers make:
First, make sure you get pre-approved as well. Don't forget that. While you're getting your home ready to go on the market, make sure you're getting pre-approved. I can connect you with a lender. Just reach out to me. I'll connect you to a local really great lender that you can work with that'll help you get that done in 24 hours or less.
Second thing is make sure you focus on your current home. It's a lot of fun to go look at houses, however, if you do not have a strategy for your current home and there's clutter all over the place, the home's not ready to go on the market and you're just looking at the next home, you're missing out because you have to have your home ready to go on the market within five days of an offer being accepted on another property. So make sure that you're really focusing and thinking about your current home before you run around and start looking at other homes.
If you've got questions, reach out to me direct.