Buying and Selling a House at the Same Time
Buying a home is a huge endeavor. The paperwork, deadlines, and research can all be a little stressful. Combine it with selling a home at the same time, and it can turn into one big, overwhelming headache. This leaves you with a big question: Is it better to put your home on the market after you’ve already moved out, or does it make more sense to sell that residence while you’re still living in it? It’s a challenging decision, says Haysha Deitsch, founder and CEO of real estate company Beechwood Acquisitions. Not surprisingly, there are pros and cons to simultaneously buying and selling your home. Here are a few things Deitsch suggests to keep in mind when you're buying and selling a home simultaneously.
Buying a real estate property and selling one at the same time is never an easy task. To clarify, Haysha Deitsch says it’s possible to buy and sell a home around the same time, but naturally, you're not going to close on a new home the exact same day you sell your old home. It would be awesome if everything was timed so perfectly, but the process isn't that neat—at least not organically. You're at the mercy of the market and potential buyers. You might find a great home you're ready to buy, but no one has put an offer on your current home. Or someone might be ready to scoop up your current home, but you haven't found a new place yet. There are ways to line up these dates, but chances are, you'll have to focus more on either buying or selling first, and there are pros and cons to each.
Making the house available for showings is key. If you’re not there, it’s easy for a home stylist to create a setting that other people could imagine themselves living in by staging your home with furniture and fittings. Ask any real estate broker whether he would prefer to sell an occupied or unoccupied home. The answer will unequivocally be “unoccupied.” They are easier to show, can be readied for showing more easily (whether they are painted, staged or simply cleaned), and usually create a more spacious appearance. According to the real estate expert, staged homes sell more quickly and for a higher price than occupied homes cluttered with the typical family’s possessions.
While selling first might seem like the best bet, it also depends on the market. Research prices in the areas where you're both buying and selling, legal site Nolo explains. You should find out whether the market favors sellers or buyers. That way, you can optimize your stronger role while protecting yourself in the weaker role, as they put it.
When you sell your home before buying a new one, you know how much money you have to work with. It's also easier to get a new mortgage when you've sold your old home. You won't have two mortgage payments holding you back. Logistically, selling first is usually the best way to go. But it does come with a few disadvantages, too. For one, you could sell without having anything lined up. You may have to rent while you look for a new home, or keep some belongings in storage.
If you buy a home before your sell your old one, you have plenty of time to move. This give you more time to get your home ready to sell and ease into the process. Of course, if your home doesn't sell for a while, you could possibly be paying two mortgages at once. If your home is already paid off, that's not a big deal. Plus, it's harder to qualify for a new mortgage if you have two mortgage payments, because you have a much higher debt to income ratio.
Deitsch suggests a variation of this plan. If you buy first, you can possibly rent your old home out for a while. This would help you cover the mortgage payments while you move into your new home. Of course, now you have the added headache of becoming a landlord. With a little preparation, it's possible to minimize the stress of buying and selling a home at the same time. Know the market, know your options, and come up with a plan for making it as seamless as possible.