Will you be buying and selling a house at the same time?
Are you nervous?
Wondering how it’s all going to come together?
I hear you!
Moving is stressful even if everything lines up perfectly. When you add the complication of needing to buy and sell a house at the same time, it is not easy. We’ve navigated this maze ourselves and we’ve helped clients do the same many times over. Needless to say, we’ve learned a lot.
So, let’s talk about 5 things you can do to navigate and minimize the chaos.
If this is your first time here, welcome! If you’ve been here before, thank you so much for coming back and spending your time with me. My name is Lindsay and I‘m proud to be your Anthem, Arizona REALTOR® with the Wise Move AZ Team at Realty ONE Group. On our YouTube channel and blog we have a lot of fun talking about all things Anthem and real estate every single Thursday, and we absolutely love having you along for the ride.
Why are you Buying and Selling a House at the Same Time?
There are many reasons why you may find yourself needing to buy and sell a house at the same time. To be clear, we’re not here to discuss or dissect your reasoning. We assume that, like most people, it probably comes down to one or all of the following:
- Don’t want to be homeless
- Can’t afford to own two houses at once
- Need to move and settle quickly
Before we jump in, I want to assure you that buying and selling a house at the same time doesn’t have to be awful. The 5 tips in this post will help to streamline the process. Also, if at the end of the 5 tips you’re thinking ‘there has to be another option!’ Don’t worry because I will be sharing a bonus tip that might work perfectly for you to remove even more stress and time pressure.
Tip #1: Connect your Agents
Will you be using the same agent to list your home and to help you purchase your new one?
If you’re moving down the street the answer might be yes, but if you’re moving from Chicago to Arizona the answer is probably no. If you’re using the same agent, this point won’t really apply to you, but if you will have one agent representing you as a buyer, and another representing you as a seller, then I want you to connect them.
Communication is Key
I firmly believe that the best way to navigate buying and selling at the same time is communicating openly, honestly, and often. Your listing agent and buying agent should be in touch with each other regularly throughout your transition to ensure everything is on track and running smoothly. Please note, that your buying agent will likely need copies of your sales documents from your listing agent. Especially if you will be purchasing your new home contingent on the sale of your existing home.
Together, your agents can discuss realistic timelines and provide you with the best service and advice. The earlier you can connect the two agents, the more prepared everyone can be when it’s time for you to make an offer on your new house.
Tip #2: Understand the Markets
You’ve probably heard the terms Buyer’s Market, Seller’s Market, and Balanced Market, but do you know what they mean for you in your current move?
If you’re lucky, you will be selling in a Seller’s market and buying in a Buyer’s market… but we all know life doesn’t always work out that way.
When you’re buying and selling a home simultaneously, you need to understand the nature of the market you currently live in and the market you are hoping to buy in. It’s important to note that how competitive a market is can vary from state to state, city to city, and even neighborhood to neighborhood. This is why it’s so important to work with local experts that can walk you through the realities of buying and selling in a particular market.
For example, if you’re planning to move to the Phoenix Metro Area, we are in a strong seller’s market right now.
Does that mean it’s a bad time to move and you should cancel your plans? No!
It just means that the market is quite competitive for buyers. It also means that usually you will need to have an accepted contract in place on your current home before you will have an offer accepted to purchase a home here. If you want more tips on navigating a Seller’s market, I encourage you to check out this video.
On the other hand, if you happen to find yourself buying in a Buyer’s market there may be less pressure to have a contract on your current home before putting in an offer on your new home. We also have a video with tips on navigating buyer’s markets.
Overall, while it’s important that you understand the nature of the market in both places, it is even more important that you hire an agent who knows the market inside and out. By doing this, you can map out your timing carefully and determine which contract you need to have in place first.
Tip #3: Learn about the Other Parties
This might sound a bit creepy but I want you to learn as much as you can about the buyer’s of your current home, and the seller’s of your future home. You may want to know where they are going. When do they need to be there? Are they also in a situation where they’re buying and selling at the same time?
As much as possible you want to minimize the number of closings that need to happen all at once. If, for example, the buyer’s of your home are contingent on the sale of their home, that could mean that there are THREE closings that need to happen all on the same day or in a matter of days. On top of that if the Seller of the home you’re buying is also closing on their new home on the same day… well, I think you get the picture. It get’s really complicated really quickly. I like to think of it as dominos. If one closing doesn’t happen it’s like one domino in the chain doesn’t fall and the others can’t either. If one home in the mix doesn’t close on time, the others can’t either.
…. And it’s situations like these that keep me up at night.
Anyways, the more information you can gather, with the help of your agents, about all of the parties involved, the better. This information will give you an idea of where there may be some flexibility if you run into any delays or timing issues in the closing process.
Tip #4: Consider Post-Possession
Post-possession can be a great option if you need to sell your current home, to buy your next home, but you don’t want to move into a rental or your mom’s basement in the interim.
Since we are in such a strong seller’s market, we are seeing more and more post-possession agreements. Post-possession occurs when you officially sell your current home but you rent it back from the new buyers for a pre-determined period of time. These agreements are usually in place for a period less than 30 days and rent is usually a nominal amount, paid in escrow. Put simply, you get to stay in your current home after closing.
Arranging for a post-possession agreement could be the perfect way to offset your sale and purchase by a few days. A few days might not sound like much, but it can make all the difference when it comes to ensuring a smooth closing on both sides. By closing earlier on your current home, it means that you have time to transfer the funds to pay for your future home, you still have a place to live, and it also gives a buffer if there are any delays with your financing.
If possible I recommend having a bit of overlap on either side. For example, if you are supposed to close on your new home on Thursday, you may want to close on your current home on the Monday before and have your post-possession agreement in place until the following Tuesday or Wednesday. This way you have a place to live if there are any delays in closing on your new home.
Tip #5: Have a Contingency Plan
I was an event planner in my previous career and I always used to joke that I spent as much time coming up with contingency plans as I did putting together the actual event. Well, guess what! The same is true when you’re buying and selling a home at the same time. I really want you to come up with a back up plan in the event that one or both of the closings is delayed by a few days.
Between your lender, REALTORS®, and escrow officers, everyone is going to be working hard to make sure that everything stays on schedule. That being said, there is always the risk that something happens to alter the timeline.
Your backup plan could be something as simple as staying with family or friends. Make sure that you think about where you will stay but also what you are going to do with all of your stuff.
Can your movers hold it for a few days?
Can you extend the truck rental?
Will you need a storage unit?
How much will your back up plan cost if you have to implement it?
By having a solid backup plan in place it will be a lot less traumatic if you have to put it into action.
I hope that these five tips have helped to put your mind at ease. I really do believe that the key here is building a team you genuinely trust, and that you can communicate openly with.
Now, I haven’t forgotten that I promised you a bonus tip. If all of this buying and selling at the same time just sounds way too stressful for you, or if you are on a really strict timeline, I have another option you may want to consider.
Bonus Tip: Consider an iBuyer
An iBuyer is a company like OfferPad or OpenDoor that will purchase your home from you. You won’t have to put up with showings, open houses, or a sign in your front yard. The other perk is that they are typically able to accommodate your desired closing date.
Now, this convenience often comes with a bit of a price tag, but it could help to keep the stress down. You may find that the offer price from these iBuyer is lower than if you were to put your home on the open market. If you are hesitating to navigate the traditional buying and selling route, you may want to get a couple of quotes from different iBuyers.
Before you do that, I want to strongly recommend that you still use an agent. The iBuyer represents their best interest not yours. By having your own agent you will have someone advocating for you throughout the process. I also recommend that you have your agent put together net sheets for both options so that you can compare the two objectively.
So, there you have it! What do you think? Are you ready to tackle buying and selling your home at the same time? I would love to hear where you’re moving from and where you’re moving to in the comments below!
Enjoy those and I’ll see YOU next Thursday!