Home Buyers Tips - Buying a Home and Sell the Current Home at the Same Time

Home Buyers Tips - Buying a Home and Sell the Current Home at the Same Time
I often receive calls from home buyers asking me to help them with finding a new home and simultaneously selling their current home.
This is not a simple situation. In today’s video, I’ll go over the steps needed for a smooth transaction and several scenarios to help you understand the best way to navigate the situation.
The first step in all call cases is to meet with a local real estate agent. This will help you get a reasonable estimate of your property’s value in today’s market. With this information in hand, you will better understand your budget and how much you can spend on your new home.
The next step is to meet with your lender to determine whether or not you can get pre-approved for financing to purchase your new home. I recommend a local lender who understands the local market. This will help for a smoother transaction and avoid many potential hiccups down the road.
As I mentioned, there are several scenarios that you may encounter.
Scenario 1: You are pre-approved to purchase a new house without the need to sell your current home.
This is the ideal situation. It allows you to explore the market and search for a new home before placing your current home on the market. This flexibility will enable you to wait until you have your new home under contract before listing your existing home.
In the perfect world, you would schedule back-to-back closings on the same day after finding a buyer for your current home. This will make it easier to schedule the movers, avoiding the potential need for storage. You can also avoid carrying 2 mortgages simultaneously.
Scenario 2: You cannot get pre-approval to buy a new home without selling your current home.
In this scenario, you must first sell your current home before submitting an offer to purchase your next home.
In some cases, a seller would be open to a contingency that you will sell your current home; however, the majority of sellers are reluctant to agree to this type of contingency as there is no guarantee that you will sell your existing home, and they don’t want to be tied up in a contract that may fall apart.
So how do we get a seller to agree to this contingency? You need to accomplish several things first to make the seller comfortable with the chances that you will be able to sell your house.
Number 1: You must have an accepted offer and a signed contract for your current house.
Number 2: You need to finalize the attorney review. This means that you and your buyers have finalized all of the contract terms and any possible contingencies.
Number 3: You must complete the inspection period and all negotiations regarding any credits your buyers will receive for any necessary repairs.
Number 4: You need to ensure the appraisal process has been completed and that your buyer’s bank has issued them a commitment. That means that the underwriter has formally approved your buyer’s mortgage.
Once you have accomplished numbers 1 through 4, you can submit an offer on your new home contingent on selling your current home. Many sellers would be open to this type of offer because, in this case, it is incredibly likely that you will be selling your house. The odds that your deal falls through are so low it is as if there was no contingency at all.
The alternative to the seller agreeing to purchase their home contingent on the sale of your house is to try to structure the sale of your current home to allow for a lot of time between contract and closing. This will give you a lot of time to find a new house. There are 2 ways to accomplish this goal:
First, you could just simply list your house for sale and negotiate with any potential buyers. Although this may sound a little crazy, today’s market is definitely a seller’s market. With so little inventory, sellers have significantly more leverage than in the past. Additionally, due to the lack of inventory, many buyers are willing to commit to a contract with many months until closing. I recently had a buyer sign a contract for a house in January, with closing scheduled for early August.
Second, you could have your local real estate agent list your property on the MLS with a contingency stating that you are selling your house contingent on finding and purchasing a new home.
👔 Ron Cohen
📱 Call or Text us: 201-240-2991
🌐 Website: roncohen.kw.com/
📨 Email: [e-mail]
📅 Free Real Estate Consultation (Zoom Call)
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