I love Daniel Craig movies! When I saw him play James Bond in Quantum of Solace, I knew this guy was the real deal. From what I’ve heard, he’s always done most of his own stunts, but this time, he took a real “leap of faith.” In the movie, he jumped from three stories up onto a moving bus. To do it, he had to know exactly when to jump. If he missed, he could have hit the ground hard, or even worse, been run over by a large bus.
And that’s exactly what it’s like when you attempt to jump from the safety of your stable, unmoving house, to a moving target like the house you want next.
So, the question is: When you already own a house and want to buy your next one, should you buy first, or sell first? As in most questions in life, the answer is…it depends. Most real estate agents will recommend that you buy first, and then sell. But remember, that’s in their best interest, because if you buy first, it’s more likely that you will have to sell, and they will get both sales. But that isn’t necessarily in your best interest.
5 Tips on Buying and Selling a House at the Same Time
1st Tip: If you sell your home first, you will have more control over your move and you will be better able to focus on one sale at a time. Without two mortgages on two properties, you won’t feel compelled to take the first offer you receive.
2nd Tip: You can make the sale of your current home contingent on your ability to close on a new home. You could ask your agent to put language in your listing that states the sale of your home is contingent on you closing concurrently on another home. This doesn’t always work, but if it does, it will make the whole transaction simpler for you.
3rd Tip: If Tip #2 doesn’t work, you can ask to add a new term to the purchase contract on your current home that gives you additional time (say, 14 to 21 days) to look for your next home. This way, if you can’t find a home during that period, you’ll have a way to cancel the sale of your current home or renegotiate the length of time you have to find a new home.
4th Tip: If the buyer of your current home does not need immediate occupancy, you can also ask to rent the home back after the close of escrow for a particular period of time. This should give you more time to close on that new home you’ve been dreaming about, rather than settle for whatever you can find quickly. In a seller’s market like the one we are currently in, buyers who are having trouble getting their offers accepted may be willing to give you this extra time.
5th Tip: Choose to work with a real estate agent who has experience in closing concurrent sales. This is probably the most important tip I can give you. Don’t be shy about asking your agent if he or she is experienced in this area. His or her knowledge of concurrent sales will be critical to pulling this very difficult “stunt” off. An experienced agent should make sure you price your home properly, advise you to get pre-qualified for the mortgage on your next house, encourage you and the buyer of your home to use the same title company for both transactions to ensure a smooth closing, and make sure your lender for the new purchase offers table-funding (also called same-day-funding). Table funding means the lender can fund your loan on the same day you sign your loan documents at the escrow company’s office, rather than waiting for the escrow company to mail your signed loan documents back to them.
If you don’t have nerves of steel like Daniel Craig, or concurrent sales just aren’t your cup of tea, you could always sell your house, place your belongings in a storage facility, and then rent an apartment or stay at an extended stay hotel until you find your next home. And don’t feel bad. I’m not as gutsy as Daniel Craig either.
Image Credit: RBerteig on Flickr. CC Licensed.
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