When you own a home, it doesn't mean you will live there forever. Many people buy a home knowing it is an investment, a starter home, a project, or a temporary vacation home. The home you own may have brought you many happy memories, but now your family is growing, your job has moved, or you're ready for new horizons.
If you sell the house, you will be able to finance your next home easily. The tricky part is coordinating both the selling and buying of a home in a quick sequence while enjoying a smooth transition between homes. While selling your home to buy a new one is perfectly normal, it is also a complex process. Skilled real estate professionals at The Brunswick Team can help you navigate this unique phase of your life so you can successfully settle into your next ideal home.
How it works when buying and selling homes at the same time
When buying and selling a home simultaneously, the usual goal is to buy your next house with the money from selling your current house. This can save you the trouble of saving up for a down payment, closing costs, and even moving costs. You may profit or put more on your down payment to reduce your mortgage interest rate and expenses.
However, timing is your primary challenge. You want the space between selling your house and buying the next one to be minimal. This means finding a buyer and having your bid accepted by a seller in the same timeframe and coordinating the process with both other parties for as smooth a transition as possible.
To do this, you will need to prepare for both your home sale and home purchase at the same time. These tips will help you plan and complete your concurrent home sale and purchase with success.
1) Establish a timeline
The first step is to set up a timeline of approximately six months. Thoroughly research the neighborhood where you plan to buy. In a seller's market, sellers have the advantage. In your home sale, you are better positioned to set the timeline and make a buyer wait for you. But in buying, your seller will likely have the advantage. So, it's better to align your home sale with the timeline of your purchase than the other way around.
With the help of your real estate agent, you can scope how long it typically takes to sell a home from prep to closing, as well as how long it takes to buy a home, from house-hunting to closing. Determine how long it may take for a seller to accept your bid based on availability, competition, and market trends. This will give you a better idea of how to coordinate your home sale and home purchase. Six months should be more than enough time, and you can narrow that scope depending on your plans and the market.
For example, homes for sale in Grand Junction take an average of 72 days from listing to closing. That's a little over two months but does not include your prep time for repairs, cleaning, or photography.
2) Prepare your home for sale
The most time-consuming part of the process will likely be preparing your home to sell. Take care of lingering repairs. Your real estate agent can give you some pointers on how to show your home in its best light. You can also hire an inspector to tell you what a buyer's inspector will find and give tips on how to ensure your home is in top condition when it's time to sell.
You should clean and repaint to make the home feel delightfully fresh for new buyers. Then consider whether professional staging will gain you an edge in your neighborhood and target buyers.
3) Get approved for a mortgage loan and list your house for sale
The next step is to get your finances lined up and start the timer on your home sale. Take photos of the home while your real estate agent writes the listing. Then speak with a lending agent to prepare your finances for this unique maneuver. Several financial options are designed to facilitate exactly this type of maneuver, and you may need to get pre-approved before you start looking for houses.
4) Begin house-hunting and accepting offers
You want to start sending and receiving offers at about the same time. In your home sale, you will have time to collect and consider bids to find the greatest value and convenience. In your home purchase, you will have time to send out a few bids on appealing homes and coordinate with a seller who prefers your bids to any others they may receive.
Knowing what defines a valuable offer from a buyer will guide both halves of this stage. Your real estate agent can help you craft persuasive offers and evaluate the offers you receive.
5) Choose an offer that can comply with your buying timeline
One of the most important details is to time your home sale shortly before your home purchase. As a home seller, you can ask your buyers to wait until you're ready to sell so that you're not without a home for very long before purchasing your next home. But not all sellers will be able to comply. When choosing a buyer, assess valuable offers and then make sure your buyer's schedule is flexible enough to meet your needs.
6) Negotiate with your seller to wait until you sell
If a home seller approves your offer before you are ready to close on your home sale, ask them to wait. Your real estate agent can guide negotiation tactics to make waiting more valuable to the seller. For example, you might offer to buy at a slightly higher price or agree to take on some of the seller's closing costs.
You will also want to include a special home sale contingency in your purchase contract. Make sure that you will not be obligated to buy unless — and until — your current house sells and the profits clear.
7) Close your sale, then close your purchase
Once you have both a buyer and seller lined up, all that's left is the final complex maneuver of finances and paperwork. First, close the sale of your current home, hand over the keys, and secure the payment from your buyer's lender.
Once you have been paid for the house, you are ready to finalize the purchase of your new home. You will initiate the new mortgage loan through your lender unless you are paying entirely in cash from your home sale.
8) Use temporary housing and storage to ease the transition
Managing your living situation can be one of the most challenging aspects of this process. After all, there is usually a brief period where you own neither house between the home sale and purchase. While you could use lease-backing for a little extra time to move out, the most practical answer is temporary housing and storage. In fact, in high-end home markets, it's quite common to empty your home for sale to achieve ideal staging and selling conditions.
During this time, book yourself a comfortable hotel suite or guest house and temporarily stow your furniture in personal storage. You can enjoy your transition period worry-free until you are ready to complete your move.
Move into your new home
Moving in is the best part of the home-buying process. There's nothing quite like watching a beautiful house become a home. This is your chance to arrange the furniture and your personal items to reflect the life you will lead here. Whether you are recreating a routine you love or building a new lifestyle in your new place, now is when you can personalize and finally relax.
Master the Grand Junction real estate market with Jim Brunswick
Are you moving to Grand Junction, selling a home in Grand Junction, or both? Whether you are buying or selling, Jim Brunswick of The Brunswick Team is here to guide you through a smooth and enjoyable real estate experience. We will help you prepare for your home sale by creating a stunning listing, bidding on dream homes with powerful offers, or both. Contact us anytime you need expert real estate services in Grand Junction, Colo.
