Buyers: When You Also Have a Home to Sell

It’s Buyer’s Week at the Greater Hartford Real Estate Blog. We’ve talked about the current opportunity, importance of mortgage preapproval, and trading up in a down market.

Many would-be buyers already own a home … a home they have to sell in order to buy a new one. Buying a new home while also selling an existing home can be a tricky situation. The biggest question is the order in which the sale and subsequent purchase take place. It’s best to have all of your ducks in a row before you start down the path. Here’s how you might want to go about it…

Start with the mortgage. As we mentioned earlier this week, it’s a good idea to understand what you can afford for your next home. This applies to both trading up and trading down. Additionally, a mortgage lender is going to be able to tell you if you NEED to sell your home first in order to buy. Some people are understandably averse to the thought of carrying two mortgages at once, while others are not. A lender is going to tell you what’s financially feasible for you. Based on that information, you can figure out what’s comfortable and determine your strategy for selling your home and your search for a new home.

Have a real estate agent, or agents, come visit your home. Maybe you have an idea of what your home is worth, maybe you don’t. Maybe you think you know what needs to be done to your home in order to get it ready for the market, maybe you don’t. Getting a few sets of eyes to come assess it should help you down the line when it’s time for your home to go up for sale. Agents should be able to give you a price range where they think your house will sell. Additionally, and sometimes more importantly, they can help you understand the things you should be doing upfront to make your home sell faster. Staging and addressing potential inspection issues are important steps that shouldn’t be overlooked, if necessary. Remember, you’re going to be looking for another home to move to in this case. It will be important to have your home sell quickly so that you can move along with your next purchase.

Start looking at homes for sale. Even if you’re thinking that the process may take awhile, it’s important to start learning the market and understanding how many of the homes out there will work for your needs. Also, it’s typically easier from a coordination standpoint to work with the same agent that is selling your home when buying your new home. Unless of course you’re moving to an area where the agent does not work or the agent only specializes in listing homes. As an agent, I’d rather have you look at many homes over a period of a few months and get comfortable with the process instead of looking at just a few homes and feel rushed. If you have the luxury of time, make use of it.

Consider your options for where you’ll go next. What happens if you sell your home before you find your next home? Some buyers have a gap of days, weeks, or even months between the closing on their sale and the closing on their purchase. Do you have a temporary housing solution? Is that even acceptable to you? Thinking about this in advance helps clarify what you’ll need to ask of the buyers purchasing your existing home and of the sellers of the home you’ll buy regarding closing dates. Try to find a solution that will be reasonable for all parties involved and not end up with you on the street with all of your belongings and no place to go…

If you are planning on trading up, trading down or moving to a different town and have a house to sell, it’s best to start the research, planning and preparation a few months in advance, if at all possible. Finding a good lender and real estate agent to help you will make the process a bit smoother and less stressful.