How to Simultaneously Buy and Sell a House

by Carrie Kirby on 6 April 2015 (0 comments)

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Selling a home is an overwhelming experience. Buying a home is an overwhelming experience. When you’re moving, you’re often taking on both of these herculean tasks simultaneously or within a very short time frame. Here's a comprehensive checklist of all the financial and logistical concerns you need to take care of during this doubly complex process.

Timing is critical when buying a new home while selling your old one. Here’s how to get it right.

YOUR SALE

Start the selling process before you find your next home.

Once your home is on the market, it may take three months or longer to sell – and that’s not counting the two to four weeks needed to prepare a well-kept home for market. More time is needed if you have years of clutter to pack up or plan extensive staging or repairs. Most people will need their sale proceeds for the down payment on the new home. But even if you can afford to buy before you sell, keep in mind that selling first puts you in a better negotiating position. A truly simultaneous close, where you sell and buy on the same day, can be risky, because if your sale transaction falls through at the last minute, your purchase is endangered as well.

Use the sale contract to make sure you don’t end up homeless.

Assuming you haven’t yet purchased a home when you accept an offer, your agent can put a contingency in the contract saying you don’t have to go through with the deal if you don’t find a new house. Or if the buyer won’t accept that, at least ask for a slow close to give yourself time to shop. You can also ask for the right to rent the home back from the new owners after the close if necessary.

Pick the best agent, and fill her in on your situation.

Get recommendations from friends and family who have sold in your area recently, research online reviews, and interview potential agents carefully. During the interview, mention that you are shopping for a new home too. Whether you choose to have your selling agent also represent you as a buyer is up to you, and there are pros and cons either way. Just make sure the agent you hire is on board with your choice.

Cooperate with your agent.

Keep the house clean, clutter free and smelling good, and for goodness sake never be home when the prospects arrive. When your agent calls with a showing request, try to always say yes. If a buyer on a tight schedule can’t get into your house on the first attempt, they may never look back.

Review offers with a keen eye.

Think about the closing date proposed by the buyer. If you haven’t yet started house hunting, a fast close is probably not what you’re looking for in a purchase offer. Conversely, if you already purchased a new home, a 90-day close may be something you ask a buyer to change. Beware of buyer requests for price reductions or repairs that may leave you short for your new home’s down payment.

If you’re not getting offers, find out why.

After six weeks on the market with no offers, meet with your agent to figure out what’s wrong. It might be time for a price change, or to make cosmetic improvements.

YOUR PURCHASE

Track down all financial statements.

Even after you submit that thick mortgage application, you may not be done with loan paperwork. It’s not uncommon for lenders to request “one more thing” shortly before closing day, or want an updated bank statement if the escrow lasts longer than 30 days. You don’t want all your paperwork and computer to be packed in moving boxes when those requests come in.

Create a paper trail for any large money movements.

If, say, a parent helps you financially with the purchase, the lender will need to see exactly where that extra $10,000 in your account came from. Photocopy large checks before depositing. You may need a letter confirming that the money does not need to be paid back.

Write your offer carefully.

Tell your agent exactly what you want in the contract, and read it before it gets submitted. A good agent will not forget anything that could be to your advantage when making an offer. Want to keep the appliances and the curtains? Put it in writing.

Go easy on your credit during escrow.

It may be tempting to start shopping for furniture for your new home, but if another credit check is run and your credit isn't as good as it was initially, you could lose the loan. Shop with cash or at least avoid opening new credit accounts.

Get a good inspection and be ready to go back to the table afterward.

Interview and research inspectors just as you did your real estate agent — their role is very important. Get a thorough inspection that enumerates every problem with the home, preferably with estimated dollar amounts attached. Then decide which if any of the home’s flaws the seller should remediate. If you are in a seller’s market, keep in mind that the seller may have the chance to sell the house to someone else as is. On the other hand, buyers are often successful in getting money back for some repairs detailed in the inspection report, especially safety-related ones.

Get extra inspections.

A general home inspection is a must, but it may be just a starting point, especially if you are buying an older home. Go over the report with your inspector and ask if she or he recommends any specialist inspections for the roof, foundation, plumbing, or pest damage, and get estimates when possible. Not only could these inspections reveal deal-breaking information, they are your backup if you need to request a price reduction.

The walk through is not a stroll.

Don’t schedule the walk through on closing day — make it the day before so that the seller has time to fix any issues that come to your attention. Bring a written checklist of items that were supposed to stay on the property. Turn on every faucet and flush every toilet. Turn on appliances and the furnace and AC to make sure they all still work. Note any personal property still in the home and request that the seller remove it before move-in day.

Have a plan for closing delays.

Mortgages can be harder to get nowadays, and it’s not uncommon for closings to get pushed back more than once. Make a backup lodging and storage plan so you won't be left stranded if you can’t move when you expected.

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