Handling one Mountain View real estate transaction is hard enough. Having to juggle two at one time is more than what the average person can comprehend. While it’s certainly not an easy undertaking, it is certainly possible to simultaneously buy and sell a home if you have the right knowledge and mindset going into the process. Below you’ll find a guide on how to successfully complete a home sale and purchase at the same time.
Design an ideal timeline
Developing a timeline is crucial because it helps you decide what task you should work on first and what challenges you may encounter as you go. One of the most important decisions you’ll have to make is whether you prefer to buy or sell first. There are advantages and disadvantages to either option. Selling your current home first eliminates the need to carry multiple mortgages at one time. The downside is that you may have a period of time when you don’t have a permanent address or residence. Buying first ensures that you always have a place to live but creates the possibility that you may have to make two payments at one time. There’s no one right answer for everyone, and either option is worth your consideration, depending on your unique circumstances.
For now, it’s important to have a good understanding of how long the entire process will take. Most home buyers and sellers find that it takes somewhere between three and six months to complete their transaction. This includes the time you’ll spend preparing to enter the market in addition to the time you’ll spend under contract working to prepare for closing. When you have two transactions happening at the same time, you’ll probably find that things move slower rather than faster. Commit to remaining patient and diligent throughout the process to ensure you get the best possible results.
Determine how you’ll fund your purchase
As with any home purchase, you’ll want to speak with a lender early to determine what type and amount of loan you will qualify for. It’s especially important if you’re thinking about buying a new home before you sell your current home. Your lender will want to determine how long you could carry both payments before it becomes a significant financial burden for you. The goal is to sell as quickly as possible, but you can never guarantee that this will happen. Keep in mind that you’ll also need enough cash on hand to fund your down payment and contribute to your share of the closing costs.
Some sellers are counting on using the proceeds from their existing home to fund the purchase of their new home. If you find yourself in this situation, there are a few ways that you can bridge the gap while you’re waiting for your current home to sell. Some sellers will use bridge loans to purchase a new home before their previous home sells. This short-term loan often comes with a higher interest rate and may even require collateral. You can also include a seller's contingency in the contract for your current home, but this may be a tough sell for the buyer who’s purchasing your home. If accepted, this clause would allow you to back out of the deal to sell your current home in the event that you’re not able to find a buyer for your existing property.
Decide where you’ll live in the meantime
In a perfect world, you wouldn’t have to come up with a Plan B for where you’ll live between your home sale and your home purchase. You would schedule both closings on the same day, drive from the first closing to the second closing in your fully packed moving truck, and head over to your new property to begin unloading after you’ve signed all of the papers.
Some buyers are able to plan everything out this way, but not every deal will time out so perfectly. There’s a chance that you have a period of time when you need to come up with alternate arrangements. If there are only a few days between closings, perhaps you choose to book a hotel room or stay with a friend. If you’re looking at multiple weeks of needing a place to live, you may want to go a different route. Perhaps you can secure a short-term rental, or maybe you even attempt to negotiate a rent-back agreement with the buyer of your former house that allows you to continue to occupy the space for up to sixty days after closing. Most sellers find they don’t need anywhere near this much time to find a new home to purchase, especially with the knowledge that they’ll have funding from the sale of their current home. Buyers usually need to be incentivized with a lower sales price or some other concession in order to motivate them to include this clause in the contract.
Work with a realtor who can handle both transactions
Ideally, you’ll be able to team up with the same realtor on both your sale and your purchase. This will save you a great amount of work and stress. Since the same realtor is handling both deals, they will understand the unique situation that you’re in, and they will proceed accordingly based on your best interests. They won’t have to ask you as many questions because they will have a better awareness of what you need to happen inside each deal.
Martin Quintana has plenty of experience helping clients handle multiple transactions at one time. He fully understands the unique circumstances that this situation creates, and he’s committed to helping you navigate through the process with composure and poise. He will help you earn top dollar for your current property while securing a competitive deal for you on your new home. Reach out to Martin when you decide it’s time to buy or sell Mountain View real estate.
