When buying and selling a home at the same time, you hope is that you will be able to do both closings either at the same time or close enough. The process is even more challenging because, in addition to wearing a buyer’s hat, which might be a little familiar, you will also be wearing a seller’s hat. Here are a few things that you need to know about buying and selling at the same time, and tips to help you close faster.
Challenges of a seller’s market
It is important to understand the common challenges which are part of the seller’s market as this will help you go into the purchase prepared.
· Low inventory-when you enter the seller’s market, you may discover that there are fewer homes for sale than there are in the buyer’s market. This means that there aren’t enough homes for everyone who wants to buy a home, which makes it hard for you to find a home.
· Multiple offers-another common problem that you will find when you enter the seller’s market is that you as a buyer will have to compete with other buyers who want the same home. The seller will have many people to choose from, and they will want to rank them by desirability. If as a buyer you have not sold your home, you may not rank desirably as a buyer.
· Contingent offers- when you are buying and selling at the same time, you need money from the closing to perform as a buyer. This means that a contingent offer will remain one till the closing is done. If your home is not on the market, the seller will think that you aren’t thinking about selling, and they will have a hard time considering your offer.
Strategies to consider when trying to buy and sell
There are several ways that you can deal with the buy and sell quagmire. First, you might want to consider buying first and taking time to find a buyer for the home you are selling later. However, this will depend heavily on your financial status:
· If you can show your lender that you can afford both homes at the same time, they will be willing to qualify you. You will need six months of payments for both homes in the bank.
· You will also need money for the down payment and the closing costs. If you have some savings somewhere, you can tap into them and make the payment, then settle the deficit after making the sale.
Renting back after the sale of the home is another strategy that you might want to think about. This will work well in a seller’s market. What you do is that you can ask the buyer to let you rent for about 30 to 60 days after the closing. This will give you time to locate a new home and even allow leeway for a few rejections. The good thing is that you will not have a contingent to hinder you from buying because you already sold.
Selling first followed by buying is another tactic that you may want to think about. The huge benefit which comes with this process is that it will allow you to see the exact amount you have made so that you can make offers within your means. The disadvantage is that you will have to move out of your home immediately after the closing and for the period of time that you will still be searching, you may have to rent. Other options that you could think in terms of accommodation is putting your belongings in a storage rental and putting up at a hotel or other accommodation in the meantime. If you can get a rental that allows a 30 to 30-day rent agreement, you can also move in there as you can move out as soon as possible after making the buy.
These are the options which are available for you when operating a buyer’s and seller’s market at the same time. The most important part is to have a qualified Real estate agent helping you navigate this difficult process and ensuring you do not tie yourself up and stay in the quagmire for longer than you should.