Tips For Selling And Buying A House At The Same Time

Kevin McDonald
Published on January 10, 2017

Tips For Selling And Buying A House At The Same Time

Are you in the position of wanting to buy a new home, but need to sell your current home first? Here’s an article that I’ve written for you and I hope to answer all your questions. No sugarcoating it for you, this is one of the most stressful and difficult type of Real Estate transactions out there. If you find need to sell your existing home before you can close on the new one, then please read this blog post below! Doing the Real Estate “Buy while Selling” dance requires planning because the smallest hiccup could have you very stressed out. Timing and planning in real estate are the most important components to a smooth transaction and it’s because of expertise like this that I still have a job. If you find yourself in this position, YOU NEED SOMEONE TO HELP YOU WITH THIS. I’ve seen plenty of people who thought they could do it on their own end up wishing they never tried. If you miss one thing you were supposed to do, it could end up causing a domino effect of headaches relating to your move. Let’s keep going!

Tip 1: What’s the Value of my Home and How Much Should I Expect to Walk Away With?


  You should also get an idea of what your home will realistically sell for (DO NOT GO OFF OF A GUESSTIMATE YOU FIND ONLINE). Ask your Real Estate Agent to go over the recent sales and comparables in your area and ask them to give you an HONEST assessment of what they think the house is worth. Make sure you tell your agent to give you the truth and not something you want to hear. The value your agent gives you should allow you to determine what your net proceeds will be after all closing costs. A net sheet will allow you to determine your walk away net figure after subtracting all your closing costs on the sale of your home. This will allow you to get an idea of how much money you may have to use towards your next purchase (considering you are walking away with money). Many people use a large chunk of these proceeds to determine what their next purchase price will be.  This number will give you an idea of what kind of down payment you will have. Now you can begin doing some homework for new homes now that you know what numbers you are working with.  

Want to find out what your estimated closing costs are going to be? CLICK HERE

Tip 2: Find out what price you Qualify for? First thing to do is to contact a mortgage lender to confirm that you need to sell your existing home in order to obtain financing to buy your next home. I’ve had clients find out that they did not need to sell their current home to buy another one. This is the best case scenario for you as you have more options with flexibility and negotiating leverage. The reason this is so important is because of the timing and what you need to do in between closings. If you have to sell your existing home first and fully close on it, here are some things you might not have yet thought of.

  • When you sell your existing house ALL of your stuff must be out more than likely for the new buyer to take possession.
  • Where do you put all your “stuff” in between?
  • Do you need temp housing?
  • Do you need temp storage?

If you don’t have to sell your existing home, then you could move out and make the transition more comfortable. You also have the ability to delay moving and get any work you’d like completed on the new home. The headaches come when the timelines are tight with no where to go in between closings. If you find out that you do need to sell your current home, you should give your mortgage lender the estimated net proceeds amount that you will take home to help them determine what your budget should be. Tip 3: Talk to a Realtor About Your Options I highly recommend talking to a Realtor about the different options available for you as a seller and as a buyer. Each has their own advantages and disadvantages so it is important to work with someone who has experience in doing the “Sell then Buy” process. Here are some of the options available to you as a seller when negotiating an offer on your home:

  1. Rent Back-This would allow you to sell your home and have the opportunity to be the new buyer’s tenant for a certain amount of time. When the deals are financed you generally have up to 59 days before the buyer needs to take occupancy. If it is a cash buyer, then you can negotiate a longer period if it works for both parties. Generally, the rent amount that you pay is equal to the buyer’s carrying costs of the property (Mortgage Payment+Property Tax+Insurance+HOA (if any)). The benefits of this is that you won’t have to move out right away after closing and worry about moving your items to storage and then to the new home. The risk here is if you haven’t found your replacement home right away you are on the clock to either find it or think about moving out at the end of your rent back period.
  2. Home of Choice Contingency-This option gives you the security of still being able to back out of your current home’s escrow in the event that you do not find a suitable house. Listings with Home of Choice contingencies sometimes do not get the same activity from buyers as the buyers get nervous that they could be wasting their time looking for homes if you do not find your next home.
  3. Pack Up and Move in with Family-This option would be the worst one for many people :p. This would entail just doing the deal and moving in with a family member or crashing on someone’s couch for awhile. Not many are able to do this.

You should sit down with your Real Estate Professional and go over all the different options and pro/cons for your situation. Negotiating Options as a Buyer (Before Selling): House to Sell Contingency: If you do not have your house under contract and try to buy another house you would enter into what’s known as a house to sell contingency. This means that your contract to purchase your new home is contingent upon you finding a buyer for your house. Sellers do not like to accept these kind of terms since they have no idea how long it will take for you to get a buyer. In the 2016 Real Estate Market, most homes (if priced correctly) are selling right away. What if you are overpriced?   What if your house can’t sell? Think about it as a seller. Accepting an offer with a house to sell contingency would tie your house up with someone else who may or may not be able to perform.  The only time I would advise a seller to to take a house to sell contingency in this market is if you received an offer way too good to pass up. For example: A seller receives an offer with a buyer that needs to sell their house first.  The seller does not know about the buyer having a house to sell and they verbally agree on a price of $600,000.  The buyer decides to then let the seller know they must to sell their house prior to buying the next one.  Once the seller finds out about the house to sell contingency, they come back to the buyer and counter to $615,000 because of the terms.  They can also just flat out reject it and tell you to come back after you have a buyer(most likely to occur). In other words you as a buyer will most likely pay in some way, shape, or form for having a house to sell contingency in your offer.  Sometimes you can pay for it with terms or sometimes with price. When you go to buy your next house, you want to get a good deal right? Having a house to sell can affect the terms and price you may negotiate, therefore I advise to get your current house under contract before entering into a contract to buy a new house. Having your home in escrow with the buyer’s inspection and financing contingencies removed gives you more negotiating power and is almost as good as having the money in the bank. it’s ok to start looking around and see some houses, but you want to either have your house under contract or be very close to receiving one once you decide to put an offer on a house you would like to buy.

Tip 3: List Your Home

  real-estate-agent-careers   You should list your house for sale with a true online marketing plan using proper photos and positioning.  There is no need to aggressively look for homes to buy right now since you will be needing to sell your existing home to buy a new one, but it is wise to to start doing research online to get a good idea of what’s out there. The last thing you want to do is fall in love with a house you cannot yet buy only to see it sell to someone else.   As your home is being shown to potential buyers your agent should get a grasp if an offer is going to come in or not.  If you are receiving 5-7 showings a week then you typically are very close to getting something. If you are showing over 10 times a week you most likely will get an offer soon.  If you are not showing at all it is more than likely either your marketing or price.  Most times it’s price and you may be due for a price change before your accumulate too much market time. You need to use your judgement to see how to proceed with your home buying search.  If your agent advises you they feel like an offer is coming in soon, you should trust their opinion and get more aggressive with your home search.  If your agent says you are not going to move at this price then you should relax your search a bit. You must remember that inventory is always coming on and off the market. What you see today might be sold tomorrow and the good deals go fast.



Make Sure Lender Has Everything They Need

This is not something you can procrastinate. You want to be as proactive as possible with your lender.  A good real estate agent will also help you with this and should be staying on the lender to make sure your file has an appraisal ordered and gets into underwriting immediately.  Underwriting is the process your loan gets submitted through once your lender has everything they need.

Make Sure Your Buyer’s Lender Is Doing Everything On Their End

One of the ways to blow this up is if your buyer’s lender decides to take a nap. You want to make sure your buyer’s lender is doing their job.  The appraisal should be done within the first 7-10 days after you accepted the contract. You also want to make sure their file is in underwriting shortly after the appraisal takes place.  Your buyer will have a mortgage contingency in their contract.  This means that the contract is contingent upon securing financing by a date specified.  This date is referred to as the loan contingency date.  This means that your buyer will have received their loan approval by a certain date.  That date should be no later than 21 days from your acceptance of your sale, but can be as short as 17 days depending on what the lender thinks.   Please feel free to use the contact form below or call me if you have any questions. Also, feel free to check out the rest of my blog posts for more useful Real Estate information.

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