A common question in real estate is, “Can you buy and sell a home at the same time?” The simple answer is yes – and it occurs more than you think.
However, if you’re a homeowner who wants to sell your current home and buy a new home at the exact same time, there are a few things you should know first.
Should You Buy or Sell First?
When determining which you should do first – buy or sell a home, consider your financial situation, market condition, and when you need to be in your new home.
Selling first gives sellers an advantage in buyers’ market. In a sellers’ market, buying first is often the best choice for sellers.
Advantages & Disadvantages of Buying Before Selling
If you’re financially able to juggle two mortgages, then buying before selling can be a great option for homeowners.
Advantages of Buying Before Selling
- Taking time to search for the right home
- Controlling the timeline of your move
- Relocating once
Disadvantages of Buying Before Selling
- Managing multiple mortgages
- Rushing the home sell
- Financial strains
Advantages & Disadvantages of Selling Before Buying
Selling your current home before purchasing a new one may seem like the most pragmatic solution, but it’s not always the most beneficial.
Advantages of Selling Before Buying
- Not rushing the sale
- Having money on hand for purchasing
- Paying one mortgage at a time
Disadvantages of Selling Before Buying
- Feeling a rush to purchase a new home
- Having to move twice
- Paying for temporary housing
Challenges of Buying and Selling Simultaneously
Buying and selling simultaneously can be overwhelming at times. If you are considering doing it, make sure you’re prepared by knowing the challenges of buying and selling a home at the time.
If you buy a new home before you sell your current one, it can be tough to come up with a down payment when your equity is still tied up. Additionally, many people are not equipped to financially handle two mortgages. Plus, homeowners with FHA and VA loans are only allowed one mortgage at a time.
It’s a complex process
Buying a home and selling a home can be a difficult process on their own. Combining the two together is even more complex. There are several details and logistics that need to be determined, more people involved, plus you have to have timing down to a science for it to work out.
Buying with contingencies may make your offer weaker in a competitive market. Home sale contingencies are often risky to the seller because there’s no guarantee that the home will sell.
How to Buy and Sell a Home at the Same Time in 6 Steps
While challenging, it can be done. Follow these 6 steps to successfully buy and sell a home at the same time.
Step 1: Analyze the market and Make a Plan
Analyze the current market and area in which you want to live to ensure you’re making the best financial decision. Determine when it’s best to put your home on the market, move into a new home, and more.
Step 2: Prepare your home to sell
Declutter your home, then fix the details such as holes in the walls, uneven paint jobs, or make the paint in each room neutral.
Step 3: List Your Home will a Real estate agent
Find a real estate agent that will listen to you, answer your questions, and help with all specifications related to your current situation.
Step 4: Start looking for a new home
Your real estate agent will know what you want in a home and neighborhood, and knows the current market situation in the area that you’re looking in.
Step 5: Apply for Financing
Everyone’s financial situation is different. There are some homeowners who need to sell their current home first for equity. However, there are many financial options available for all types of buyers.
Step 6: Buy Your New Home
In a hot seller’s market, it’s important to know exactly what you want, have the financial aspects ready, and act quickly on a home once you find it.
Find an Agent to Help You Buy and Sell at the Same Time
Buying and selling simultaneously is risky and overwhelming. The smart thing to do is find a real estate agent to assist you through the process.
If you are looking to buy and sell a home at the same time and want to make the process easier, work with our partners at HomeLight. They specialize in simultaneous transactions so you can avoid the stress, risk, and hassle of buying and selling at the same time.