When you want to buy a new home and sell your old one at the same time, success can come down to timing and a little luck. In a perfect world, you could have a buyer agree to purchase your house the minute you buy your next home. Odds are, you will end up with some overlap because you’re at the mercy of potential buyers as well as the market. So, how do you survive the experience?
Use a real estate agent. One of the best ways to help you survive buying and selling a house at the same time is to work with a trusted real estate agent. The agent can determine the market values of homes and talk you through the timing and negotiation.
Know the real estate market. Although you might be tempted to sell your house first, it really depends upon the market. Research prices in the locations you are buying and selling and find out if it favors buyers or sellers. The general rule is in a buyer’s market, you want to sell first, and vice versa for a seller’s market.
Add a contingency. Whether you are buying or selling, you can add a contingency clause in your contract. When you are buying, you can ask the seller to make the purchase contingent upon the sale of your home. When you are selling, you can add a contingency to the contract to make the closing date align with the closing date on your new home.
Consider a loan. A bridge loan is a short-term loan that can cover your down payment on a new home until your old one sells. Another option is a home equity line of credit (HELOC), which allows you to borrow against your home’s equity. You could also use the HELOC for your new home’s down payment and pay it off when your old home sells.
When buying and selling a house at the same time, use these tips to set yourself up for smooth closings and minimize your stress.
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