Going through the process of selling a home is often an emotional, time-consuming endeavor. Buying a home is a complex process as well. Doing both at the same time can be challenging. If you’re contemplating doing both, it’s best to know what your options are to help ensure the process goes smoothly. Buying and selling simultaneously requires staying on top of many different tasks. It’s always helpful to work with an experienced, local real estate agent who can project manage, utilize their network of trusted local vendors, and serve as your advocate. To help you get started, we have answered some common questions.
Should I buy or sell first?
The answer to this question really depends on what you think will make your life easier. Starting the selling process first is most beneficial from a financial perspective. Once you sell your home, you’ll have more cash on hand. This improves your overall financial health by paying off your mortgage and increasing your available down payment. But if you do sell first, you will need a place to stay until you can find your next home to purchase. Or, you may be able to negotiate a rent-back agreement with the buyer. This allows you to temporarily rent the house. While renting, you have more time to pack and find a new home.
If you start with the buying process, then renting back your home isn’t necessary. You’ll be able to pack up all your belongings and move into the new place. But this transitional simplicity can lead to more financial hurdles. If you haven’t sold your house, then you may be juggling two mortgages. This can impact your loan terms by carrying more debt. Plus, gathering enough for a down payment could be challenging. If your down payment is less than twenty percent, obtaining private mortgage insurance (PMI) may be necessary. Lastly, buying first works best if your current house sells quickly. If, for some reason, it doesn’t, a bridge loan might be an option. Bridge loans can cover the down payment on a new house and are repaid once your existing home sells.
Should I accept a contingent offer?
Deciding whether to accept a contingent offer really comes down to timing. There’s no guarantee that the buyer’s home will sell fast. This is especially true if they currently live in an out-of-state housing market where you may be less familiar with what’s hot and what’s not. Consequently, if you’re hoping to sell your home quickly, then it’s best to include a timeline in the contingency agreement. This ensures everyone is on the same page and gives you an out if their selling process drags on.
Accepting a contingent offer also depends on the level of interest in your home. If your house isn’t attracting many potential buyers, a contingent offer might be a good option. That said, there’s always the possibility that you accept a contingent offer and then receive another offer. Thankfully, it’s easy to prepare for this scenario. Simply include a “bump” clause. This allows you, the seller, to accept the offer, but continue showing your house to prospective buyers. If you receive a tantalizing offer without contingencies, you can “bump” the first offer. Typically, you include language that gives the first buyer an opportunity to respond and waive the contingency and/or offer more, depending on the scenario. Always make sure you include a time frame in the “bump” clause to require the first buyer to respond. If you don’t receive a response, you can legally back out of the contract and pursue the new offer. Regardless of which direction you go, it’s best to come up with a clear and transparent plan of action.
Should I buy a home with a contingent offer?
Purchasing a home with a contingent offer really depends on the local housing market. If the neighborhood you want to buy in is highly desirable, a contingent offer most likely won’t be enough to secure the house you want. As a result, sellers may be reluctant to accept or will require a “bump” clause, as mentioned above. In this situation, to have the best chance, you may have to make an offer outright.
If you are house shopping in a more relaxed market, a home sale contingent offer has benefits. This type of offer allows you to transition easily between houses. It’s a great way to avoid renting temporarily or placing belongings in storage. Once your home sells, another awaits your arrival.
Should I stage my home?
Yes. While staging a home might seem daunting, it’s definitely worth it. Staged homes typically sell faster and for more money. This is always a plus, especially if you are buying and selling simultaneously. Also, you have to consider how people look at homes today. Most buyers look at them online first. A staged home draws people in with enticing photos. Staging your home is the best way to attract buyers and help them take the next step. For more information about the selling process, check out our tips when preparing to sell.
Is now a good time to buy and sell?
Based on what we’re seeing in the Kitsap County real estate market, we think the answer is yes. The average sale price in the second quarter was $694K. While the number of sales is down overall, sellers are still receiving 100% of their asking price. We’re moving toward a more balanced market so buyers don’t tend to be in such competitive situations compared to the height of the pandemic when there were many multiple offer situations.
The best way to achieve your real estate goals is by working with a local real estate agent who can negotiate effectively on your behalf. Our Brokers are highly rated and very knowledgeable. Check out these home-buying tips and insights from a few of them. Contact us, and we’ll help you get started with the process of buying and selling simultaneously.