Buying and selling a home is equally stressful, but what about when you are trying to coordinate both simultaneously? There are a lot of moving parts, and the agents involved work together to ensure the smoothest possible transactions for our clients. If you are selling your home and want to close on a new home purchase at the same time, here are some things to think about to make your move as smooth as possible.
Indeed simultaneous closings are rare these days, especially when financing is involved. Regulations to protect consumers have made simultaneous, or double, closings very difficult to pull off. Concurrent closings occur when a party is selling and buying properties at about the same time, usually within a couple of days of each other. If you wish to close on the sale of your home and purchase a new home back-to-back, the best scenario is to work with the same title company and escrow company for both transactions. Usually, the sale of your home is closed; first, your mortgage is paid off, then the purchase of your new home is closed.
Selling your home ahead of buying is the most risk-free alternative, as neither transaction is contingent on the other. However, this requires your family to make an extra move and have a place to live while you wait to close on a new home, so in terms of convenience and expense, it’s not always the best scenario. If you can secure a short-term rental or put your belongings in storage and stay with your family, then you can enjoy the luxury of taking your time to look for and close on your new home. One option that sometimes works out is renting your home back from your buyers while you wait to complete your purchase. This option works well when the buyers are not in a hurry to move in themselves and you can agree on a timeframe for you to remain in the home.
Buying ahead of selling is a dream in terms of convenience. You can take your time moving and maybe do some renovations or decorating before you move in. But will you qualify for a new mortgage without a contingency on selling your existing home? It may be a great option if you can swing the mortgage or pay cash. Remember to consider how long you can afford to maintain two properties– with maintenance costs– in case it should take you longer than expected to find a buyer for your present home. In this scenario, you may want to rent your new purchase back to the sellers or list it as a short-term rental while you wait to close the sale of your existing home.
Consider your buyers and sellers carefully when coordinating a sale and purchase within a short time. The last thing you need is a seller or buyer displaying signs of being uncommitted to the deal. While no deal is guaranteed until all the closing documents have been signed, when you need a purchase or sale to coincide with your schedule, you should carefully evaluate who you sign a contract with. A contract with contingencies on other deals, a lender expressing doubt about final financing approval, a low good faith deposit, buyers asking for unreasonable repairs or allowances, or sellers whose moving plans are questionable are red flags that your deal could fall apart.
