How to Buy and Sell a Home at the Same Time (the Right Way)
True, each real estate transaction is unique.
Just not in every single way.
If you need to sell your home and purchase a home at the same time, you really only need to do two things to ensure the highest chance of success:
First, create a game plan and stick to it.
Second, hire a Realtor with an established history of successful contingent transactions.
You might be wondering:
“What about timing? What about current market conditions?”
Well, if you make sure to follow through on these two steps, you’ll be completely covered.
If you’re reading this post, you already know that planning is essential. And who better to help you plan than a true industry expert?
Answer: no one.
By preparing yourself for the process, you increase chances of success exponentially.
The Major Difficulty
Why are forming a game plan and enlisting the help of a professional so important?
Because buying and selling are both tricky operations. There are many moving parts.
By doing a little homework and asking a few key questions you can avoid a myriad of complications.
Either you need to become an expert or you need to hire one. Hiring is a lot easier.
Everyone knows how important it is to be an informed Buyer. But in this case, it’s just as important to be informed seller.
What You Need to Know About Buying and Selling
Selling and buying homes at the same time is possible. Just make sure you are knowledgeable enough to pull it off. The first step is learning the difference between contingent and noncontingent buyers.
Contingent vs. NonContingent Buyers
A contingent buyer is someone whose ability to purchase a home is dependent on the sale of another property.
Unless you’re buying a home for the first time, it is likely you may find yourself in this situation. It’s fairly common. However, the goal of contingent buyers is to attract non-contingent buyers.
A noncontingent buyer is able to purchase a home without the need to sell another property. These types of offers are less common, yet they are more likely to close when received. That’s because contingency is probably the number one obstacle for most buyers.
Most buyers who are buying and selling at the same time don’t have a choice but to handle both transactions at the same time.
You might find yourself in a situation where you have to sell before you buy, or buy before you sell. Whichever description fits you, you should have an understanding of the place other buyers and sellers may be coming from. This will help you prepare for any potential, undesired outcomes and have a course of action to take in case things fall through—a “contingency plan”.
Types of Home Sale Contingencies
There are two kinds of home sale contingencies:
A settlement contingency is used when the buyer has already accepted an offer on their home. In this case, the buyer already has a contract inhand and a closing (or settlement) date on the calendar.
A sale and settlement contingency is used when the closing of the property is completely dependent on the sale of the buyer’s home before.
If You Have to Buy a Home Before Selling Yours
A home sale contingency is the most favorable for you as a contingent buyer.
You can even add a home sale contingency clause to allow more time to be selective about buyers. This can also afford you the time to have multiple inspections performed.
A home sale contingency allows for a seamless transaction while protecting the buyer from getting stuck with two mortgages to pay or being stuck without a home altogether.
Essentially, a home sale contingency bares the least financial risk for the buyer.
However, finding a seller willing to agree to home sale contingencies is inevitably a tougher task.
As soon the seller receives the first noncontingent offer, your offer gets “bumped”. This means that you have to come up with a letter of preapproval or proof of immediate funds to prevent your offer from becoming null and void.
This just shows why it is so important to find someone who can help you execute a home purchase and sale at the same time.
If You Have to Sell Your Home Before You Buy
If you’ve ever bought and sold a home, you’ve probably learned that selling a home is usually more difficult than buying a home.
Home sale contingencies are by far the most risky for sellers because there is no guarantee that the buyer’s home will actually sell. To compensate, your agent may include a “kick out clause”—which allows you to continue to market your home to other potential buyers.
However, sellers should note that homes listed as “under contract” are less appealing to buyers. Many potential buyers won’t even consider homes that are already under contract. In a situation where the seller usually has control, a sale and settlement agreement takes control away from the seller.
Whichever situation applies to you, a licensed Realtor can really make the process less painful.
Finding the Right Realtor to Help You Buy and Sell
When looking for a Realtor, make sure you don’t take the first one that comes along.
In fact, you should interview multiple real estate agents. Remember that you are hiring them to do a complicated job for you, and they need to be qualified for that job.
Take the time to vet them:
● Ask about their experience.
● Always make sure to see an agent’s credentials first.
● Ask to see their books. Compare listing vs. sale prices and timelines.
● Inquire about their staging process and marketing team.
● Quiz them about their professional network.
● Request a list of past contingent clients that you may contact.
● Ask them a few basic questions about the sale and transfer of title contingency.
Make sure you select a professional who is able to articulate any risks and circumstances that you may encounter, as well as all of your options.
By choosing a trustworthy real estate professional, you dramatically increase your chances of success.
The post How to Buy and Sell a Home at the Same Time (the Right Way) appeared first on Total Atlanta Realty.
