When contemplating a move, it can be a challenge to buy and sell at the same time. Even with a balanced market, this can be difficult. If you are trying to buy and sell at the same time, the recipe for success in a healthy market is to first get your house ready to list. This means decluttering, cleaning, touch-ups, repairs, etc…
The next step is to go look at different properties. Ideally, you would find your next home, get under contract, and list your home the next weekend. You would try to shore up dates so that you can close within days, if not on the same day, for both closings. But every situation is unique and the most important thing is that you have a knowledgeable and experienced agent by your side who can guide and advise you. Let’s take a look at how buying and selling a home at the same time works and what your options are.
When buying and selling a home at the same time, it can be a complex process.
Here are some key things to keep in mind:
- Timing: It can be challenging to coordinate the closing dates of the sale of your current home and the purchase of your new home.
- Financing: It can be difficult to obtain financing for a new home if you have not yet sold your current home.
- Contingencies: In order to protect yourself, it is a good idea to include contingencies in the purchase contract for your new home that are contingent upon the sale of your current home.
- Bridge loan: A bridge loan is a short-term loan that allows you to borrow against the equity in your current home in order to purchase a new home.
- Agent: Consider hiring a real estate agent who has experience with handling simultaneous home sales and purchases.
- Preparing your home for sale: It is important to prepare your current home for sale in order to maximize its value and attract buyers.
- Being flexible: Be prepared to be flexible with your move-in and move-out dates, as they may need to be adjusted to align with the closing dates of both properties.
- Discussing with a financial advisor: Talk to a financial advisor to see if it makes sense for you to buy and sell a home at the same time.
What is a bridge loan and how do they work?
A bridge loan is a type of short-term loan that allows an individual or business to borrow against the equity in their current property in order to purchase a new property. The loan “bridges the gap” between the sale of the current property and the purchase of the new property.
Here’s how it works:
- The borrower uses the equity in their current property as collateral for the loan.
- The loan amount is typically a percentage of the current property’s value and is used as a down payment for the new property.
- The loan is typically for a short-term period, such as 6 to 12 months, and carries a higher interest rate than a traditional mortgage loan.
- The loan is typically paid off when the current property is sold, and the proceeds are used to pay off the bridge loan.
- Some bridge loans may require the borrower to make monthly interest-only payments while they wait for their current property to sell.
Bridge loans can be useful for individuals or businesses who need to purchase a new property before they have sold their current property. However, they are also considered to be higher-risk loans, and not all lenders will offer them. It is important to discuss the pros and cons of a bridge loan with a financial advisor and weigh the options before making a decision.
No One Right Answer
The bottom line, there are all sorts of ways to go about the buy-sell process. We have seen it done in many ways, and we have helped many buy-sells in all sorts of different ways. Your agent is key in this process. They can help negotiate with the other agent and make sure the contracts work in everyone’s favor. The last thing we want to see is a seller in a short-term rental in between closes. This does happen, but we like to help and try to avoid this if it is possible.
How Can We Help You?
Our goal is to keep everyone informed on what’s happening in our community as well as in the real estate market. If you need any help or information regarding buying or selling, please reach out. We want to help you find your dream home, or put your home on the market. If there’s anything you need at all, please get in touch!
If you would like more information on how the Summit and Park County real estate market is doing, you can also sign up for our detailed monthly market report by clicking this link.
Scott & Anne Lindblom
LIV Sotheby’s International Realty