Real Estate Matters
By Elisa Jo Eagan
When buying and selling a home at the same time, each real estate transaction comes with its own set of challenges, except that everything is magnified times two.
The addition of time constraints and another set of buyers and sellers increases the need for appropriate expectations, patience and perseverance. Proper planning and preparation are the keys to a successful conclusion for both transactions.
Building a great team will help you put together a successful plan for your sale and purchase. What follows is a list of the professionals you will be working with. Communicate with them early on and often to keep your process moving forward toward the finish line.
Your Agent
Your real estate agent can help you develop a clear idea of your needs and expectations for the process.
Everything will be time-sensitive. That’s why it is important to be very clear with your agent about your timeline. If your purchase will be out of the area in another market, allow your local agent to refer you to a qualified agent in the new area where you will be relocating. Their coordination and cooperation will be vital to the smooth running of the process.
Right Pricing
Of course, you will want to sell your current home for the highest possible price as quickly as possible. That means you will need to right-price your home rather than overpricing it.
Most home buyers typically search for homes in pricing increments of $25,000-$50,000. If it is suggested that the approximate value of your home is up to $400,000 or $500,000, for example, you would be best to list at or under that price. This will create increased buyer interest and activity and, in most cases, get closer to asking price. In many cases you may get offers above your asking price.
Searching for
Your New Home
You will want to keep your timeline in mind when searching for your new home, which means you may need to put more time into your home search, or be a bit more flexible in your requirements.
If you are looking to sell your current home and buy and/or build your dream home, you may want to put in place a longer process with a stop-over into a short-term rental property to buy some extra time.
Your Lender
Spend time talking with your lender about the way your financing will work when you are freeing up money from the sale of your current home to purchase your new home.
Depending upon your financial situation, you may need to close on your current home before initiating financing on your next home, or you may be able to qualify for both mortgage loans simultaneously.
There are loan products available that can help you obtain the equity of your current home in order to move forward to purchase your new home, and then pay the temporary “bridge” loan off when you close.
While this may make the transition possible, it can also put you in a bind if the sale of your current home falls through or it is delayed. Talk these scenarios over with your lender and your real estate agent. Discuss your risk tolerance in this regard and find out which option will work best for you.
Your Title Company
Depending on the location of the two properties, you may be able to close using the same title company on both your sale and purchase. Alternatively, you may be able to conduct closing by having the closing documents sent to you by mail to be signed and notarized for your convenience.
Your Movers
Unlike a standard move, you may need to have your household goods packed and stored or moved to a short-term rental for a while before they arrive at your new home. Talk to your movers about your options.
Short-Term Lease Options
You may have visions of a same-day sale and purchase. While this does happen, it requires everything to proceed perfectly with the buyers and sellers on both sides of two different transactions, as well as with the lenders involved.
Just in case this does not occur, it is a smart idea to put a backup plan in place. If you need more time between closings, you may want to rent month to month or stay in a short-term rental that is furnished while your personal belongings are stored until your new home is ready.
Rent Back Your
Current Home
If you know when your new home will be ready for you, it may be possible to negotiate a rent-back, also known as a use and occupancy agreement, on your current home that you are selling. This can be done as a courtesy to you from the buyers of your home.
The goal is to make buying and selling at the same time successful and seamless, based on your individual wants and needs.
Remember there is no place like owning your own home!
With hugs, love and warm regards.
For real estate information and advice, contact Elisa Jo Eagan, the “Real Estate Godmother,” at 609-703-0432. Learn more at therealestategodmother.com.
