How To Buy And Sell A House At The Same Time
Are you looking to buy a new house but can’t because you need to sell your current one first? In this episode of Recon SoCal, I'm going to show you how to buy and sell a house at the same time. I’ll explain how to navigate this tricky transaction so you can get into the home of your dreams and avoid being temporarily homeless.
Do You Need To Sell To Buy?
Because buying a home and selling at the time can be tricky, you must plan ahead of time. Doing so can save you thousands of dollars and help you avoid a stressful situation. The truth is that if you don’t properly plan, you can become homeless, living in a hotel between closings. Trust me: no one wants to be in that position.
When you're buying and selling a house, there are many moving parts. Some of those parts are contingent on one another, so it’s important that you have a plan. One of the most important parts of this process is timing. You need to properly time the purchase and the sale of your home to make sure that you have a successful transaction.
Before we begin, the first question you need to ask yourself is if you need to sell your current home to obtain financing to buy your next home. If the answer is no, then you have a lot more flexibility in this process. If you do need to sell before you buy, it becomes a lot more challenging.
Getting An Offer On Your Home First
In the perfect situation, you do not want to be under contract on your new house without being under contract on your current house. If you're in this situation with your lender, the reason why they won't let you buy a new house is that you have to clear the debt with your current property. This ensures that you can purchase the new home under the same budget as your current one.
The ideal timing would be that you sell your existing house first before your lender will allow you to buy another property. Having your current home under contract before shopping is going to allow you to have more purchasing power with your next property.
Put yourselves in the shoes of the seller. Would you even contemplate or look at an offer from someone who has not sold their home yet—which is contingent on selling that home to complete the transaction for your home? That is exactly why it weakens your purchasing power. If your home is already for sale, it's under contract with the buyer, and you are working through that transaction, it's way more appealing and gives you way more purchasing power.
Timing The Transactions
The best practice, once your home is listed, is to start looking at new properties and what's available for you in the market. You want to be intimately familiar with the market because, once you get an offer and plan to accept an offer, you want to be just as aggressive going after the purchase of your new home.
In a perfect world, your home for sale receives an offer and goes under contract before you get an offer accepted on your next one. You can then move where you want to go. If you follow these steps, you'll be a more credible buyer when it's presented to the home that you're trying to purchase. This is because you've already gone through the contingencies and removed a lot of the risk for the seller. You’ll then look like a much more qualified purchaser.
Avoiding Homelessness
Another thing we want to take into consideration is the amount of time it takes for that transaction to complete. From the time an offer is accepted to when the transaction closes is about 30 days. What I like to do with my home sellers is extend that closing date. This will give us a little more time and buffer space, allowing us to extend our ability to search. It also gives us a blanket of security to find another property and get under contract with those offers.
One thing we absolutely want to avoid is poor timing. We see this all the time; somebody sells their house, but they don't have the transaction properly timed. They end up in this weird void of homelessness before they can get into another property.
Of course, we have some options in the military that most people can’t take advantage of, like base housing. That's just another factor to keep in mind because you'll be moving twice instead of just once. You also may not have the financial ability to cover those moves, and the military isn't going to do it for you.
Let The Professionals Help
When you find yourself in this position—which we do all the time because we move across the country every three years—I hope you're consulting with a professional. That professional is me. I can help you wherever you're at to make sure that you have a smooth transition from one base to another or whatever your duty station situation is.
At the end of the day, it all comes down to discipline and timing. We just need to apply those concepts that we've had ingrained in us over the years and make sure that we execute a plan. So if you need help to navigate buying and selling a home at the same time, feel free to reach out to me and I’d love to connect. We can walk through the process and get you on the right path to ensure you make a successful move.
If you’re currently in the PCS process—whether it's to or from Southern California—I can help you navigate that process and make sure it goes smooth as possible for you. Don’t forget to subscribe to my channel so you never miss an episode of Recon SoCal. Stay tuned to see what I feature next!
