Does the idea of selling your home and buying another home scare you? With all that’s at stake, it SHOULD scare you! I’ve helped sellers sell their home and buy another home countless times and I’ll be the first to tell you that there is a LOT to this process and there are several pitfalls to avoid. I’m Chuck Shaver of the Shaver Group with Keller Williams Heritage Realty here in Central Florida and I’m going to provide some tips to help when selling and buying a house at the same time.

1. The first thing you need to do is evaluate your needs. You first need to know WHY you want to move. Is it because you don’t like the kitchen cabinets and want a fresh start? Or is it because your family is growing or you have a job transfer? The point here is that you need to be sure that you’re considering doing this for the right reasons. The reality is that it’s expensive to buy and sell a home and you don’t want to get halfway into the process, or worse yet, all the way through…only to realize you made the decision to move for the wrong reasons.
2. Secondly, you need to be aware of the current market situation. Will your home sell quickly? Will you have difficulty finding a home that you like? In a Seller’s Market your home may sell quickly, making the sale side easy. However, in this same Seller’s Market the inverse is also true. It may be just as difficult to buy a home as it was easy to sell your home. Of course, the opposite viewpoints occur in a Buyer’s Market.
3. If your home will sell quickly, where will you go? What if you cannot find the right home when your home goes under contract? Are you willing to take the fam and move in with mom and dad? How do you feel about living in Grandma’s RV for a few months? Can you afford an Air BNB? Nobody wants to SETTLE on something as important as a new home, so give this some real thought. When I’m talking to homeowners that are considering this option, I usually want to hear them voice several options, with a general confidence that they’ll be able to find a home they’ll love once their home is under contract. Then, I also discuss that nuclear option…the WHAT IF they CANNOT find the home they really want and then we discuss the viability of those options.

I think this is a good time to make a little disclaimer here. Selling a home can be very stressful. Buying a home can be stressful. But selling and buying a house at the same time can be absolutely bonkers. I literally feel like a therapist sometimes. As such, be aware of your emotions throughout the process. I’m careful to go almost overboard preparing my sellers for this component of the process and I’m making regular check-ins to ensure my customers aren’t freaking out over something that doesn’t exist. I’m also making sure they’re paying attention to what they NEED to be paying attention to.

So, you’ve decided that you DO want to sell your home and buy for the right reasons, and you have addressed your plans and have a nuclear option in place. Now what?

Now I know that you may have been in your home for some time, and you’ve made your payments on time, and that’s definitely important, but do you have any equity in your home? Has the market risen to give you that equity? Maybe you purchased your home with little or no money down. These situations can leave homeowners upside down and owing more than their home is worth. Check your mortgage statement to see how much you owe.

Speak with and select a local Realtor®. There are always some that believe that they don’t need a Realtor®, but this is no time to be gambling that you can pull it off. The reality is that you’re going to need someone with experience to hold your hand and walk you through this process – the sale AND the buy side – all culminating on one stressful afternoon 8 weeks from now. There are likely several hundreds of thousands of dollars at stake. Yes, you could save a few bucks, but you could also lose a whole lot more. Speaking of that dough, discuss how much you owe and how much you have in savings to see if they believe you’ve got a shot to make it work.

Yes, you could use your Cousin Sally – she’s a new Realtor®, but she’ll work hard, right? Yes, she may have a heart of gold, work like a dog, and be a great marketer, but without years of experience doing exactly THIS, it could be a good way to ruin those family get-togethers after Sally makes a minor error in judgment that ends up costing you thousands of dollars, or even the entire deal. As such, interview several experienced Realtors. You’ll know when you find the one as he or she will speak with confidence about how the process works and they’ll be the one digging to determine your motivation, willingness, and ability to accomplish the job that YOU want to happen.

When you’re speaking with your Realtor®, you must be realistic about pricing. Many sellers want the Filet Mignon price for their chopped steak house, and I work to get them every penny they’re due, but if sellers don’t price their home where it can ACTUALLY sell in a timely manner, then they’re at risk of wasting a lot of time AND money. I’m surely not saying pricing it like a fire sale, but pricing your home properly can often get you a higher net price than starting above where the market has an interest. Proper pricing gives you and your Realtor® a level of confidence that you can sell in a given time frame, and it gives the seller of the home you want to buy a level of confidence that it will sell. After all, would you take your home off the market for a buyer that isn’t serious about selling their home? I wouldn’t and I wouldn’t advise my sellers to do so either.

Homeowners often want to make an offer on a home BEFORE they put their home on the market. While this DOES provide a bit of a security blanket, in a Seller’s Market it can be very difficult to get another seller to accept your offer when your home isn’t even on the market. Although this IS a possibility, it can end up forcing you to unnecessarily give up any leverage you may have on the buy side. As such, in a Seller’s Market its typically better to put your home on the market BEFORE you make an offer on the new home of your dreams. In a Buyer’s Market it isn’t as important, but it’s still usually going to help with leverage when attempting to make that purchase.

Next, speak with a couple lenders – not JUST the one that handled your last mortgage. Perhaps your Realtor® can recommend a couple lenders that they’ve closed deals with. I know it’s a headache to make more calls, but we’re talking about thousands or tens of thousands of dollars that could be at risk depending on which lender you choose. Once you’ve selected a lender, tell them EXACTLY what you plan to do. They benefit from your success, so don’t hold back on your intentions, and listen carefully to what they tell you to do.

Consider some alternatives to traditional financing. I work with a company that will buy your home and provide financing as a cash offer. This gives my customers assurance of selling their home and then allows them to make an offer on another home as a CASH offer. It’s a very good product that eliminates a lot of stress and, surprisingly, it’s quite inexpensive. Another option is to use an equity line. Perhaps you’ve got enough equity in your current home to fund the purchase of another home. This option could save you a bunch of dough in closing costs and can simplify things a good bit. Maybe a bridge loan could be an option? These are very rare these days, but it’s another option. There are other options out there, too.

Once you have determined your real motivation, you’ve selected a qualified Realtor® and you’ve found the right lender and know exactly what you can afford, it’s time to get serious. By now, most sellers have already been on one of the hundreds of websites out there looking at homes – perhaps you were doing that before you got on this site! But now you know what you can afford, or want to pay. As such, before you pull the trigger on listing your home,  it may be wise to consider some options that you could live with. Don’t fall in love with any of them yet, save that for once your home is on the market and you have an accepted offer. Too much emotion too early can be dangerous. Unfortunately, I’ve learned this the hard way and made some bad financial decisions when I let me emotions control my decision-making process.

This process is tricky, and it’s wrought with complications. As such, the reality is that problems usually do arise. This is when you’ll be grateful you have an experienced partner on your side. Talk with your Realtor® about contingency plans. For instance, what if the home you’re selling doesn’t appraise? What if this buyer needs to extend for some unforeseen reason? What if there’s an issue with the inspections on the home you’re purchasing? Maybe you’ll need to at least consider pre-occupancy or post-occupancy. I don’t like either of these options, but they are options that must at least be considered. In a Seller’s Market, sometimes sellers can be permitted to stay in their home for a period after closing. Again, it isn’t desirable, but it’s an option. Of course, there’s always the possibility of simply extending the closing date if problems arise. However, an extension must be agreed to by all parties, so don’t just assume that it’s a given. I was once called a wet blanket by one of my happy customers, but he understood that it was my job to be worried about all of the potential issues and that I was the one that had to be ready to move should anything undesirable arise.

Your Realtor® should be planning and coordinating the entire process while dealing with multiple title companies, Realtors, and lenders to keep things running smoothly. When your home is on the market they should be communicating with you regularly and helping you to find the right home for you in short order. It can feel like there is a lot of pressure here, and there is, but remember, you’ve already determined that this person knows what they’re doing and you’ve chosen them as the expert to carry you to the promised land in your new home. Remember to BREATHE, you will get through it. There are a lot of moving pieces, but it is done every day and you can be successful too!

Perhaps I’ve scared the death out of some of you, but I hope not. The process can appear daunting to potential sellers; however, someone that’s done it over and over should be ready for the challenge. Yes, it can get ugly if things go awry, but I’m not addressing that here. If you have additional questions about selling and buying a house at the same time, please reach out to me directly.

Published on August 04. 2022 / Tags: Buying and Selling homes / no comments.