Introduction
I’m going to walk you through how to buy and sell a home simultaneously, to ensure that all the pieces come together easily for you!
Most first-time home sellers never think about how tricky this process can be… until they have to buy and home and sell one during the same time period. It’s a tricky Process!
Buying a new home while you’re still living in your current home can create a long string of dominoes. And if just one of these dominoes fails to tip over in the line, the whole process falls apart.
Option # 1: Include Closing Contingency
You can sell on a contingency basis. In this case, you put an offer in on a new home with the understanding that if your home doesn’t sell you won’t be able to buy. You must include those terms in the purchase agreement so all parties are aware. However, if the sellers of the new home have a “kick-out clause” in the contract , you risk another buyer presenting an offer thus requiring you to remove the clause or withdraw from the contract. A risky solution if you want buy a home and sell one simultaneously.
Option # 2: Own Both Homes Simultaneously
This is a viable option only if you can afford to carry two mortgages. In this case, you would get a mortgage on the new home, and wait to move out of your current home when it is convenient. If you have enough equity in your existing home you could get a bridge loan. This allows the transaction on the new home to go through with the sellers not under pressure leaving their current home right away. There may be higher interest rates and transaction fees but the homeowner must weigh the benefits against the costs.
Option # 3: Rent From The Buyers
Home sellers can stay in their current home after it sells by renting it back from their buyers. That arrangement is a rent-back deal.
In this case, you would get all of the proceeds from the sale without having to move – which gives you both the time and money to purchase a new home.
Of course, the big drawback is that it transfers the risk to the buyer and most buyers are hesitant to take the risk of renting their new home and prolonging their own move in date while paying rent and a mortgage.
Again, buying a home when you have a home to sell simultaneously can be tricky business.
I’ve seen transactions where 5 (or more) families are all buying and selling contingently. This creates a really long string of uncertainties which must be carefully monitored!
Orchestrating a transaction like that is an art form and you need a great real estate agent who can guide you through that process.
If you’re thinking about making a move (or know someone who is), I can help! Just send me a text. No pressure, no sales tactics, just helpful advice and the guidance you need!
And finally, if you’re not thinking about making a move just yet, feel free to save this link for future reference, so you can come back to it!
Come back soon!
