Buying and Selling a Home at the Same Time

This guide covers buying and selling a home simultaneously without stress. With all the chaos throughout the United States surrounding the COVID-19 coronavirus, many families have decided to pack up and move their families. There are many reasons for Americans relocating.

Some families are moving to work, others are unhappy with how their local municipalities have handled the pandemic, and others do not feel their states are run correctly.

Regardless of the reason for your relocation, this blog will detail how to sell your current home and buy another home. This homebuying and mortgage process can be incredibly stressful because there are a lot of moving parts. GCA Forums Mortgage Group has helped numerous families move and is prepared to help you and your family! There is no reason why buying and selling a home simultaneously has to be stressful if it is coordinated and planned carefully.

How To Prepare for Buying and Selling a Home at The Same Time Without Stress

If you have a home to sell, this can add to the already stressful process. Getting your home prepared for the market is stressful enough. Once you go under contract, the stress level goes even higher. It is important to stage (decorate) your house as elegantly as possible to receive the maximum amount of money when selling your property.

Once you are under contract, you must stay on top of your seller’s financing and ensure they will close and, more importantly, close on time. You must pack up all your belongings and prepare to move during this time. This part of the process is incredibly time-consuming and stressful. If you feel like the financing may fall through from your buyer, this will have a trickle-down effect on you buying your next home. In today’s crazy real estate market, many transactions take backup offers to be safe. You will want to talk to your real estate agent to see if this is possible.

Strategic Planning When Buying and Selling a Home at the Same Time

Let’s assume you are under contract to sell your current home. It is possible to close on your current home and buy your next home on the same day. This will require good planning and a highly skilled mortgage team to ensure this happens. If the buyer of your current property is also contingent on the sale of their property, this can cause an even larger ripple effect.

Unless you have a giant stack of cash to rely on, you must stay on top of all parties throughout the process. Many states, such as Illinois, utilize real estate attorneys to ensure all parties agree. However, this is different in most states. Your real estate agent can only do so much. Some of the responsibility will be on you.

Getting Approved For a Mortgage and Working With Your Lender

About getting your mortgage clear to close, you will need to work directly with your mortgage team to make sure all required items are sent in on time. The faster you get documents to your mortgage team, the faster you will have clearance to close. Once you are clear about closing, you will rely on the buyer’s funds. If you are relocating across the country, this can only add more stress to the process. For more information on buying and selling the same day, please contact Mike Gracz at 800-900-8569. Text us for a faster response. Or send an email to us at GCA Forums Mortgage Group at gcho@gustancho.com.

Buying and Keeping the Exiting Home as a Rental

Some families may decide to keep their current house and buy another one. Depending on your debt-to-income ratio, this may be a possibility. Even if you have yet to have a history of being a landlord, if you have a 25% equity position (or greater) in your existing property, you may utilize up to 75% of the fair market rent to offset your mortgage payment.

The fair market rent is calculated based on comparable rents paid in your area determined by a licensed appraiser. They will use Fannie Mae form 1007 (or other required forms from the agency). Please remember that this qualifying income can only offset your current mortgage payment, including your taxes, insurance, and homeowner’s association dues. The 75% of your fair market rent can only cancel your mortgage payment and not be counted towards extra income for qualifying on the next property. This is important. Please reach out to our team for further explanation.

Tax Liability When Buying and Selling a Home at the Same Time

Are there income tax implications when selling a house? GCA Forums Mortgage Group always recommends you contact your tax professional for specifics. We are not certified tax professionals and cannot give you advice on filing taxes. However, it is important to consult with your accountant on any taxes that may need to be paid with the sale of real estate. This amount could hinder the available funds you have. Dustin Dumestre, an associate contributing writer for GCA Forums, says the following about buying and selling a home at the same time:

Some individuals are in a financial position where they can buy a home first and then sell their current home. This can dramatically reduce stress and moving costs.

Having space to keep your belongings during the move can help the process. Many agents have told us that during the age of the COVID-19 coronavirus, many buyers are using this process. They think it may be because more people work from home and need more space. So, they keep their current office set up while looking for a new home. Remember that maintaining ownership of your current home before buying the next one significantly changes your mortgage qualifications. I would like you to please get in touch with GCA Forums Mortgage Group to review your unique situation.

Having Two Mortgages At The Same Time Until The Exiting Home Sells

Most individuals and families we speak with have the same questions when they reach out. Can I afford to pay both mortgages? Do you offer bridge loans? What kind of assets do I need to purchase the next home? Am I able to rent out my current home? The general rule is that if you’re tight on money, you must sell your house first. If you have a strong income and large assets available, typically, you can keep your current home and move to the next property, then sell your old home.

Qualifying For A Mortgage With A Lender With No Overlays

With all the information in this blog, you can see why picking a professional mortgage team is very important. The GCA Forums Mortgage Group team is available seven days a week and is here to work for you. We will answer any questions you have about buying and selling your property. If we don’t know the answer, we will pair you with a licensed professional who will. We work alongside many real estate agents as well as real estate attorneys. We look forward to helping you get into a perfect home for you and your family. Call Alex Carlucci at GCA Forums Mortgage Group at 800-900-8569 (or email gcho@gustancho.com) with any questions. Text us for a faster response.

FAQ’s on Selling and Buying a Home at the Same Time

This article explains some of the most overlooked and complex issues homeowners face when trying to buy and sell a home at the same time.

Frequently Asked Questions (FAQs) on Buying and Selling a Home at the Same Time

How Can A Person Sell And Buy A Home Simultaneously?

Yes, it’s feasible, though it involves quite a bit of planning and collaboration. Many sellers do this by utilizing contingencies, bridge loans or temporary rental properties for the duration of the gap between selling their old home and buying a new one.

Isn’t It Advisable That I Sell First and Only Afterwards Purchase a New Home?

Consider selling first if:

• The net sales from the sale of the old home is needed to invest in the new home.
• You find paying two mortgage loans concurrently inconvenient.
• You want to determine a budgetary range of for the next purchase.
• However, if not able to locate another home, then selling first may mean having to rent a home for a while.

Should I Consider Buying a New Home Space Instead of Having to Sell My Existing Property First?

Buying first makes more sense if:

• You have enough savings or means to temporarily afford carrying two mortgages.
• The real estate business is fierce and time is of the essence so you will manage to close on your new house.
• You do not want to go through the hassle of being at the rush to buy before you are able to sell your home.
• This method can come at a cost of having two houses at the same time, which can put a strain of money on you.

What Are Home Sale Contingencies, and How Do They Work?

• A house sale and purchase contingency is a part of your purchase offer that you have added which allows you to buy your new house only after you have sold the one you already own.
• Pros: Shields you from owning two homes at once.
• Cons: Can be detrimental to your offer in a highly competitive market because it is always best to have offers without such contingencies for sellers.

What Are Bridge Loans, and How Do They Help?

• A bridge loan allows you to gain funds briefly before you are able to sell your old home so that you can buy the new one that you want.
• Pros: Allows you to have value from the house that you already own to buy another one.
• Cons: Comes with large interest rates as well as high fees which increases your costs in total.

What is a HELOC, and Can I Use it for This Process?

HELOC is a mortgage in which money can be borrowed against the equity of a house, which allows people to buy more homes.

• Pros: Great option for leveraging equity to acquire a new home without needing to pay for the entire property right away.
• Cons: The debt on the home equity will have to be settled within the closing date of the house you sell which may get difficult if the house doesn’t sell when anticipated.

How Can I Manage the New Purchase and New Selling Dates?

Coordinate Closings: Ask your agents and attorneys to make sure to settle the date for both transactions at the same time.

• Back-to-Back Closings: Try to make use of both transactions within the same timeline meaning both properties are settled on the same day or closely back to back.
• Extended Closing Periods: Settle for an extended period of time to manage your transition more effectively.

What Are the Risks of Buying and Selling a Home at the Same Time?

• Market Timing: The main issue here would be the current prevailing market trends.
• Financial Strain: In some cases people do end up buying and selling a house at the same time leading them to have two properties at once.
• The issue arises for people who do not have that foresight and are unable to find new accommodation at the same time.
• Contingency Challenges: This most likely will depend upon how competitive the market is but having contingency clauses within your deals can make your offers not as attractive to buyers.

I No Longer Want to Live in My house But Would Want to Keep it as An Investment Can I Rent it Out?

Yes, renting your current home can be an alternative if:

• You are looking to rent it out and cover your mortgage payments through the earned income which will cover your debt.
• Still, there are obligations and liabilities attached to being a landlord. You might still need funds for the down payment on the new house you wish to purchase.

Is it Necessary to Stage My Current House When Searching for a New One?

Staging your home ensures it sells faster and at a higher price.

• Tip: To make the property attractive to buyers while getting ready to move, first assess how much furnishing is too much, then remove non essential and personal items.

What is the Impact of the Market on Buying and Selling a Home at the Same Time?

• In a buyer’s market: There is an oversupply of homes, hence more options available to you, but it might take some time to sell the existing home you have.
• In a seller’s market: Houses change hands within days, but the competition to buy a new home is likely to be fierce and property prices higher.
• How to interpret the market indicators within your region will assist you in setting up the necessary strategy.

What Role Does a Realtor Play in This Undertaking?

A competent real estate agent can assist you with:

• Planning the timing of the two transactions accordingly.
• Managing the contingencies process.
• Securing the best terms in both transactions in their favor.
• Offering directions regarding the price of your existing home and the home you are intending to buy next.

How Can I Finance a New Home if Still Dealing With The Sale of The Former Dwelling?

Options include:

• Bridge Loan Holding: Holding a loan that finances a new temp purchase until your current home is sold.
• HELOC: Drawing equity from existing dwelling to finance the new downpayment.
• Saving Up: Cutting back on expenses long enough to use cash reserves for a downpayment and replenish them once the home is sold.

What Should I Know About Leaseback Agreements and Who Benefits From Them?

With a leaseback agreement, you can sell your home and the buyer temporarily rents the property back to you.

• Pros: Buyers have the chance of locating and closing on another property before selling the leaseback.
• Cons: Rent should be paid, as well as negotiated mortgage payments with the buyer.

What Are the Advantages and Disadvantages of Seeking Temporary Housing as I Make This Transition?

Renting an apartment, or staying with a family, can be a useful option is temporary housing allows you to do the following.

• If you have already sold your current home and are looking forward to purchasing a new one.
• People who are looking for a new property and don’t want to feel overly pressured require it.
• If the sale and purchase times don’t fit together properly, the market aligns.

What Are Some Important Tips to Deal With Stress Especially During This Transition?

• Maintain Time: Preparing for and completing both transactions should take a substantial amount of time.
• Solicit Services of Experts: Look for a qualified real estate broker, an attorney and potential lenders.
• Be Prepared for Modifications: Have standby plans so that if different dates still can’t meet, there is no disruption.
• Cautious With Concurrency: Bear in mind with the possibility of overlapping with housing expenses.

Which of The Documents Can Help in Executing Both These Transactions?

• For Selling: Provides in the Selling of Yard, for example – Property’s deed, Mortgage clearance certificate, various legal forms, and current bills for the last three months.
• For Buying: Pre-qualification letters, a deposit amount voucher, and an agreement to buy.
• Having such documents ready can make the work a lot easier.

Is it Possible For Me to Buy and Sell Without the Use of an Agent?

Yes, however it is stressful to deal with two transactions, and if you add an agent to the mix, it should make things easier. Real agents have in depth knowledge of the market together with experience that aids with negotiations bringing about a better outcome.

What Do I Do if I Am Unable to Sell My House Quickly?

• Reduce the Asking Price: Change the price of the house on listings to widen the number of potential buyers.
• Market More Aggressively: Try to work it out with your agent in order to market the house better.
• Rent the House: Renting the house out may be better if you’re not able to sell it properly.

How Do I Prepare For Replacing Two Houses Without Suffer Excessive Damage Accounting and Costs?

• Prepare a Rainy Day Fund: Set aside a considerable amount ready for possible out of ordinary new costs, like alternately having to pay two mortgages.
• Obtain Loan Pre Approval: Know the limits you qualify for when looking for a new house.
• Estimate closing costs: Closing costs should include the costs of both transactions, which include the commission, taxes, and even moving.

Conducting a simultaneous buy and sell of a house requires planning, proper finances and experienced people to make it happen. Even though it is complicated, doing these transactions in one go can be efficient and allow you more easily settle in your new house.