In an ideal world, you’d buy a new home, move, and when all the dust settles, you would focus on selling your previous home. But for most people, that’s not possible and, instead, they must juggle buying and selling simultaneously. However, careful planning and consideration can help prioritize your needs and keep you on a path that works best for you. Relying on your REALTOR® is paramount as he or she can help you remain objective through what is certain to be an emotional process.
Consider the Neighborhood
As you get started, consider the market in which you are buying and selling and remember: real estate is local. Houses may be selling fast in some areas of town or certain neighborhoods and not others. Just because your friend’s house that has a similar layout to yours sold for a certain amount does not mean yours will do the same. Work with a REALTOR® to understand what you can realistically expect when you put your house up for sale. Your REALTOR® will be familiar with what is happening in your area and on your street, so you can price your home accordingly. This is key as pricing your home too high or low could result in it languishing on the market. Unless you want to pay two mortgages, this is not an option.
You will also want to take this time to identify your needs in a new home and prioritize. Do you want a shorter commute to work? Do you want to be close to schools or green spaces? Would you prefer an older neighborhood or one with new construction properties? Check out a few different areas of town and talk to your REALTOR® about home prices in these areas so you can prepare your budget, and identify where you can compromise, if needed.
As you prepare your finances, weigh the pros and cons of which to do first: buy or sell. If you buy first, moving will be easier, but it also skews your debt-to-income ratio, which could make it harder to qualify for a new mortgage. If you sell first and don’t find a new home quickly, you may have to rent something temporarily, and find storage for your things. Make a budget and prepare for contingencies. Even if you’ve planned to sell your home first and are prepared to rent while buying, know that even the best-laid plans can go awry. For example, you might end up juggling both mortgages, if your buyers have difficulty securing their financing.
Prevent a Poor Decision
One of the most important things to do in the buying and selling process is to stay rational. If your home has sold but you haven’t found a new place to live, don’t let anxiety push you toward a bad decision. It can be easy to feel like you have to compromise on things that are important to you just because you need to find a home. But, this rash action could lead to regret. Consider a temporary housing solution, such as an apartment, which may help you feel less stressed. Conversely, don’t accept a bid on your current home that you feel is too low just because your finances are strained by two mortgages.
Let your REALTOR® guide you through the process, and don’t hesitate to ask questions frequently. Your REALTOR® understands that this is stressful for you. However, this is their area of expertise, and they can walk you through what to expect and how to plan accordingly – along with the many options that are available.
This is an exciting moment as you move into a new home. By making the necessary preparations and remaining calm, you can successfully pull off both buying and selling at the same time.
To begin your search for a property or a REALTOR®, visit SABOR.com.