How stressful is buying and selling a house at the same time? It depends.
While there is certainly a lot to juggle while you are wearing both the home seller and homebuyer hats at the same time, if you know what to expect (and have a good support system around you!), the stress of the property transfer process can be significantly reduced.
How to Conquer the Stress of Buying and Selling a House (Complete Guide)
Here is everything you need to know to stay calm, cool, and collected when you are trying to sell your old home and purchase a new one all at the same time.
Logistical Steps to Take
There are a few things you can do when buying and selling a home at the same time to make the process run a little bit more smoothly.
Here are the administrative and logistical steps you can take to make things easier.
Build Equity in Your Current Home
A great way to reduce the stress of buying and selling a house is doing as much damage to your current mortgage as you can before it is time to sell. By doing this, you can build equity in your current home.
Equity is the percentage of your home that you currently own. For example, let’s say you bought a $200,000 house with a $40,000 down payment.
At the beginning of your time as a homeowner, you will have 20% equity in your house because you own 20% worth. When you would like to sell your house, let’s say you have paid $100,000 into it. So, you have 50% equity in your home.
The faster you pay off your mortgage before you sell, the more equity you will have in your home. This means that you will receive more cash to put towards the down payment of your new home.
Check If You Qualify for a Second Mortgage
In order to purchase a new home before you have sold the one you currently live in, you will need to be financially sound enough to carry a second mortgage.
If you are unable to take out two mortgages at the same time (many potential homebuyers are not), then you will technically need to close on your current house before you secure financing for your second, but that doesn’t mean that you can’t start looking.
Collaborate with Your Realtor to Analyze the Market
You will first need to decide if the current housing market in your area favors buyers or sellers.
If it favors buyers, it would be in your best interest to focus your attention on selling your home first. This way, even if you can qualify for two mortgages, you won’t be stuck paying bills for two properties while you wait around for bites on your current home.
In a seller’s market, you should have no problem looking to buy a home with your current property already listed, as it should not be too hard to find a potential buyer.
Include a Lease-Back Option in Your Contract of Sale
One thing to consider when putting the home you currently live in on the market before you have a new place to live is what you will do if it sells before you are able to secure one.
Will you move to an apartment to live? If you would prefer to avoid having to move twice, sometimes people who are buying and selling a home at the same time choose to include a “lease back” option in their contract of sale.
This means that the buyer knows that he or she will not be able to move into the property right away, but rather that you will pay rent to them each month, for a set period of time, until you are able to successfully purchase a new home.
Things To Do To Improve Your Sanity when Buying and Selling a Home
There are also a few steps you can take to maintain your sanity while juggling the sale of your home with the purchase of a new one.
Here are a few things you can do to make your life a little bit easier:
Use the Same Realtor
If you are moving locally, perhaps to a bigger home to accommodate a growing family or downsizing for retirement, you can consider using the same Realtor to help you sell your current home and purchase your new one.
Finding the right fit in a Realtor can be difficult, so if you find someone who you trust and know that you work well together, you should try to keep him, especially as you will need to significantly lean on your Realtor during this process for his expertise and advice.
Just be sure to avoid a “Dual Real Estate Agency.” This is when the same Realtor represents both the buyer and the seller of the SAME home. These situations come with a myriad of conflicts on interest.
Use the Same Lender
If you have been happy with the service you received from your current mortgage lender, it can take some of the stress out of purchasing a new home while trying to sell your old one to simply stick with them.
This is especially easy to do if you are moving locally, or your lender is a national brand with branches around the country.
Stick to a Routine
Extreme stress is not good for anyone.
When you are trying to buy and sell a house at the same time, it is important to remember not to let it consume your entire life.
Remember to set aside time each day for a deep breath, a cup of coffee, or a time of reflection and meditation. This way, your mind can be clear to make the best choices for your current situation.
Buying and selling a home at the same time? Why not list your home with Clever? For a flat fee, our professional Realtors will take the stress out of selling. Call us today at 1-833-2-CLEVER or fill out our online form to get started.