It can be challenging to perfectly time selling your existing home and buying a new one without good organization. In an ideal scenario, you sell the existing home first and then move on to buy the new home. Be prepared for this balancing act with these five crucial steps.
1. Organize Your Finances
Before you put your home for sale, it’s essential to understand your financial situation. What can you afford in terms of a new mortgage? Is this going to get you the type of property you want and in the area you want? Understanding your finances has two benefits:
- You will know the lowest you’re willing to accept for your home.
- You will understand your purchasing power post-sale, allowing you to quickly eliminate homes not in your budget.
2. Work with the Same Broker
It goes without saying that it’s much easier to work with one realtor than two. Use the same broker to sell the existing home and to buy the new home. They have all the details of your current situation, so they can explain timelines to relevant parties. They’re also motivated to work quickly for you, so they can get two sales and move you promptly.
3. Make a Contingent Offer
A contingent offer includes a stipulation for the sale. If you were buying a house before you’ve sold yours, you could put in a contingency. That contingency would state that if you’re unable to sell your home, you can pull your offer.
If you’ve already sold your home, you may have accepted an offer that included a contingency. If your buyer is unable to sell their home, their offer may be void after a predetermined period of time. Let’s say you assumed their home would sell, and you purchased a new home during the waiting period. Now, you’re in a situation where you have bought a house, but your existing home is back on the market.
If your home was sold with a contingency offer, consider also adding a contingency when buying. You can state that if your existing home’s sale doesn’t close, your offer on the new home will be void.
4. Chose Closing Dates Carefully
Make sure to choose realistic closing dates that give you enough time to buy and close on a new home. If your housing market is hot right now, this is often not a problem. However, if you’re buying in a weak market or during the off-season, you’ll want to give yourself extra time. Make sure to consult with your real estate agent as they should know how much time you need for closing.
5. Have a Back-Up Plan
If the sale and purchase of homes don’t line up, you could be in a tricky situation. This either means you’re paying for two mortgages or you don’t have a home to live in. You don’t want to be pressured into buying your next home. So, have a back-up plan for both situations.
Ideally, have at least one month’s worth of double mortgage payments saved up. If you’re stuck paying two mortgages, you’ll be financially prepared.
Additionally, have some conversations with friends and family. Is there someone you can stay with if you don’t find a house to buy right away? Or, look into your rental market. Are there places you can rent on a month-to-month contract as you search for a new home?
Hopefully, you won’t need to resort to these tactics, and it all aligns perfectly!
If you’re looking to purchase a home in the Dallas area, Grand Homes are the top home builder focused on quality. We have been building homes for over 30 years and have won over 100 design awards. You can trust that you’ll love your home by Grand Homes. Contact us today for available properties in Dallas.