How To Guide: Sell Your Home & Buy a New One at the Same Time
Unless you’re moving from a rental, a family member’s home, or a property you intend to rent out (or use as a second home), you’re likely in a position where you have to sell your home and buy a new home at the same time. It’s a prospect that can feel daunting for even those who have done this before. After all, it can seem like a “chicken or the egg” scenario: Do you focus on the sale so you know how much money you’ll get, or do you focus on finding a new home so you’ll have a place to live lined up once your home sells?
While the answers depend on many factors unique to you and your home, we have seen it all when it comes to this situation. Here are the ten things you'll want to keep in mind when you’re a buyer and seller at the same time.
Focus on the Home You're Selling First
Once you’ve made the decision to sell your home, it’s tempting to jump to the next step. For one, a new home represents a fresh beginning. Searching for a new home also eases the anxiety that comes with the uncertainty of selling your current place. The problem? If you’re not devoting the same care and attention to the sale, you might not do the things you need to do to get the most money for your home or to sell it on the timeline you’d like. Half-hearted decluttering (a must for staging), procrastinating on the repairs your realtor suggests and other missteps that happen when your heart is in the new home search can cost you in the long run.
Find a New Home
Conversely, there are homeowners who are so focused on doing everything they can to sell their home for the highest price that they’ll avoid even thinking about finding their next home. While potentially getting more money for your home isn’t a downside, the true issue is where you’ll live after the sale. A rental that suits your household might not be immediately available, depending on your preferred area. Or, you might not be able to find a short-term rental that works with your timeline for finding a new home.
Find an Agent
If you’re moving a few miles away, sticking with a local real estate agent is perfectly fine. If you’re moving further than a neighboring community or city you’ll need someone who is an expert in that particular market. Your attention is going to be divided just due to the simultaneous nature of your sale and purchase. An agent who really knows the neighborhoods and how quickly the market is moving means you’ll have the data you need to find the home you want (without you having to do hours upon hours of research).
We have relationships with agents all over the country so if you're looking for a recommendation, let us know!
Consider Renting a Storage Unit
On the surface, it makes sense: Why go through the time and expense of moving your stuff to a storage unit, only to move it again to your new place? In this case, though, the time and money you save pale in comparison to the hassle. When you have to declutter for staging, begin prepping for your eventual move and still need your home to look presentable in the process, having a storage unit takes a lot of stress out of the equation. Just remember that it’s a temporary home for your stuff — make sure you’re taking a quick moment to organize items in boxes and label, label, label.
Learn About Mortgage Recasting
A mortgage recast is when you make a lump-sum payment toward the principal balance of your loan. Your lender will then reamortize your mortgage — your loan will now have a new (lower) balance. The idea is that you can lower your monthly payments since your principal went down, but your interest rate and term remain the same.
Most commonly, homeowners recast a mortgage once they’ve purchased a new home but haven’t sold their old one. Once the previous property has been sold, then the homeowner can use the proceeds of the sale toward their new mortgage.
Always Have a Plan B
(and Plan C)
Even if you’ve devoted the right attention to both the sale and the search for your next place, the market is the wild card. You might be surprised with multiple offers within days of your listing hitting the market, a buyer who has all their paperwork in order and a transaction that doesn’t hit any snags whatsoever. While that’s an ideal situation for most sellers, it’s one that will completely throw off your plans. If your realtor thinks that the market is hot enough to lead to such a scenario, you’ll want to have a list of short-term rentals, movers and (if needed) self-storage facilities that offers larger units.
Think Through Home Sale Contingencies
A home sale contingency is a clause in your contract to buy a home or sell your home that gives you a certain amount of time to sell your home before proceeding with the transaction. It seems like just the thing to give you peace of mind when you’re buying and selling at the same time. However, these contingencies can turn off potential sellers because it means the sale could fall through. When you’re the buyer, having a home sale contingency could be countered with a kick-out clause. This means that if the seller can continue to market the home and accept a better offer if it comes along.
Face Your Emotions
Once selling your home becomes a reality, you might experience strong emotions about your home. Even if you were excited to sell in the first place, seeing empty rooms, packing boxes and opening your house to visits by potential buyers can make you feel suddenly sentimental about leaving. It’s less about the home itself, but instead what it represents — the past. Don’t be afraid to speak up to your realtor if you start to feel pangs of regret or sadness. They’ve likely seen this happen in nearly every sale and can help shift your focus to your goals.
The process of selling and buying at the same time is enough to be a full-time job…yet you may have a full-time job already. Add in a family, a major work project, or a life transition (like getting married or divorced) and you can quickly feel like there just aren’t enough hours in the day to do what you need to do. When faced with overwhelm, some of us overperform (and never sleep) and others shut down (and avoid everything). Think about how you tend to react in stressful situations and consider working with a therapist to work on coping strategies to keep you productive during this time.
Keep Your Goals In Mind
From the moment you decided it was time to sell to the date of your first open house, the process of selling your home can occupy a lot of mental space. (It’s why some homeowners fall for the “Silicon Valley way” of selling their home, which can often be a mistake.) So when you get your first offer, it’s tempting to accept it to just be done with the whole thing. However, is the offer the right offer for your home? If this potential buyer one that’s actually ready to buy? You might want to hold out to see if a better offer is around the corner. While your realtor doesn’t have a crystal ball, they can give an honest opinion based on what they’ve observed in the market.
In the end, buying and selling your home at the same time is like training for the Olympics — a successful outcome involves strategy and the right frame of mind. Consider your realtor your coach in this metaphor. They’ll keep you motivated, prepare you for what to expect and offer support whenever you face a challenge. But unlike the Olympics, achieving your goal is basically a sure thing.