It’s not uncommon for a client to come to us with with the goal of selling their home and buying a new home at the same time. We’re used to it, and we understand: you need to sell the old one first so you can finance the new one, but it needs to happen quickly and you don’t want to settle.
It’s tricky! But it’s manageable. If this sounds like you, here are some things you need to know:
There’s no one way to approach the situation
Know what factors are on your side and which you have working against you.
There are a lot of factors that come into play in this scenario, including your income, equity, timeline, job obligations, travel plans, budget, etc. Basically, anything that affects a normal real estate transaction is likely to affect a simultaneous sale/buy to an even more extreme degree.
Figuring out what your priorities are is key. Do you need to be in the new house by the time the school year starts? Or is budget the biggest constraint? Do you have a place to stay if there are a few days or weeks during which you don’t have a house?
It’s important to make us aware of what biggest constraints are so that we can help you weigh the risk and impact of each potential option appropriately.
Both transactions aren’t always equally important
Often clients decide to move in order to either upgrade or downgrade the size of their space: think young couples whose family no longer fits in their small 2 bedroom, or empty nesters who no longer need the space they once did. Depending on the scenario, one transaction carries more financial significance than the other. If you’re downsizing, the sale of your home is more financially impactful than your subsequent, smaller purchase or vice versa if you’re up-sizing.
Of course, neither transaction is to be taken lightly, but keep in mind which side carries more weight, particularly when weighing the factors discussed above. Compromising a thousand dollars on one end is worth it if it saves you a few thousand on the other.
Timing is critical
Particularly in cases where clients want to move out and move in in a quick time frame, it’s critical to get the timing right. Having a cohesive, consistent team (your lender, attorney, movers, inspectors, etc) is critical in making sure everyone is on the same page and deadlines are made to keep the ball rolling. We have tons of colleagues in the industry that we trust to get things done well and on time, so we’d be happy to point you in the right direction. Now is the time to call on the tried and true.
Which leads us to… Vet your lender!
Again, we have lenders we can suggest, but whether you choose to take our advice or not, make sure you’re vetting the lender that you choose. And using a local lender is always preferable. We cannot say this enough.
Online lenders use bait and switch incentives to get you in the door, but they really can’t promise you any rate without assessing your financial situation first, and often the rates they use to entice you are rates that only work for a small handful of people’s situations.
Plus, it’s way more common for an online lender to miss a closing date. Why? They don’t have the accountability that your local lender does. Your local lender has a reputation to uphold and can’t afford to do a lousy job or drop the ball. For that reason, local lenders are way more reliable. And when you’re buying and selling at the same time, there’s nothing more detrimental than a missed closing date.
Pick your battles
You should be satisfied with both transactions, but make sure you pick your battles appropriately. Refusing to compromise on an inspection item, for example, can delay or completely crash a deal, and when you’re on a tight time constraint, that can have a big domino effect on everything else.
We’re not saying to ignore red flags in an inspection report, go way over budget in a bidding war, or settle for a home in a neighborhood you’re less than thrilled about. But again, know what your priorities are and be ready to compromise when need be.
Be prepared, even if you’re not quite ready
There are all sorts of house-keeping items associated with a buying and with selling. Keep up on these! Even if you’re not sure when you’ll be ready to make a move. These types of things might include:
Know which realtor, lender, contractors, etc you plan on using
Keep your schedule open in the case of unexpected showings or opportunities – you can still have a life, but maybe now isn’t the time to schedule a month long vacation to Europe
Get pre-approved and keep these records updated
Maintain a “show-ready” home, just in case, and if there are renovations or repairs you plan on doing before you sell, get on it!
Accept the “double-move”
We know, it’s a pain. But moving into your parents’ basement or spending a couple hundred dollars on a few hotel stays is worth it if it gets you a better deal and keeps you from making a rash decision just to avoid this hassle.
Removing the pressure of feeling like you have to be out of one house and into the other in the same day (or even the same week or month) allows you to act logically. Buying under pressure is one way to make sure you don’t get as good of a deal as you should. You should make the right decision, not the easy one.
The simultaneous sale/buy is a chaotic and stressful juggling act, but totally manageable if you’re well prepared and know where the biggest hurdles lie. We’ve done it all before and can help you navigate the process to ensure that each transaction is made with full confidence. Moving should be fun, not stressful!
Our biggest piece of advice? Preparation and foresight. Know what factors are on your side and which you have working against you. Have a Plan A, B, C, and D. And get in touch with a realtor (preferably, us!!) as soon as the thought of moving even enters your mind. There’s plenty of knowledge and advice we can offer you, even in those months where you’re still deciding on the right path forward.