How to Buy and Sell a Home Without Losing Your Sanity
Buying and selling a home simultaneously may very well be one of the most stressful experiences of all time. There are so many balancing acts and questions involved. What happens if you don’t close on time? Will you be living in a hotel indefinitely? Do you need to pay for costly storage pods? It’s no wonder that these scenarios can give you a few new grey hairs – if you don’t plan correctly.
To help navigate through the many intricacies involved in buying and selling at the same time, we pooled together our greatest tips to help to make this overwhelming experience more manageable and even possibly empowering:
- Make your Accountant, Mortgage Loan Officer and Attorney your new best friends. While your realtor is a helpful liaison in your homebuying process, it’s important to build a direct relationship with your Accountant, Mortgage Loan Officer and Attorney to align on timing.
- Accountants need to know of any implications of selling your home (i.e.: capital gains) that may result in additional fees or transfer taxes. This could reduce your proceeds and impact how much money is being applied to your new home purchase.
- Mortgage Loan Officers need to be updated on any new contract changes in real-time. The purchase of your existing home needs to be “cleared to close” and any mortgage conditions for your new home need to be reported at least five-to-six days ahead of closing. This reduces the risk of your loan approval being delayed, which ultimately impacts your closing date.
- Your Attorney should try and coordinate the sale of your existing home at least one or two days ahead of your new home’s closing date. This ensures that all money from your sale is safely secured in an escrow account to be put toward your purchase. Any additional lawyer fees will be well worth the headache you will avoid by trying to tackle two closings in one day.
- Don’t be cheap. Fix your house. Some delays are simply out of your control, including last minute documents for loan approvals. But if at all possible, try not to add to any delays with necessary repairs. If your house is on the market, you likely had an appraisal beforehand and know of needed repairs that could become problematic during a home inspection. Don’t assume they’ll be overlooked and fix them immediately. A buyer will either want repairs made ahead of the closing or some sort of credit, which takes time to negotiate. Both only prolong the process and impact your ability to purchase your new home.
- Consider temporary rental agreements. If you build a solid relationship with the buyers of your existing home, you can negotiate a rental agreement within your contract to have them move in prior to closing. This allows you to continue making mortgage payments even if your purchase closes before your sale. You can also use this approach with the sellers of your purchase in progress if you need to move in sooner than expected.
- You can do it in two steps. Who says you need to have perfect timing, anyway? If you plan and budget properly, you can find a rental, sublet or even an Airbnb for any cushion time in between closings.
- You can pay the moving company to keep your stuff. If you know you’ll have a day or two in between closings, you could save some cash by asking your moving company if they offer overnight rentals. Storage pods can be costly and certain moving companies offer secured overnight rentals. Either way, be sure to ask about insurance policies and locations of overnight truck storage to keep your valuables safe.
Buying and selling at the same time is no easy task, but it doesn’t need to be a nightmare. Creating an open line of communication with all parties involved in the buying and selling process and smart planning will save you from unnecessary frustrations.
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