7 Mistakes to Avoid When Buying and Selling Homes Simultaneously
For many people, buying a home is an exciting time. Selling a home is good, too, because it means you’re moving on to something different. When you’re buying and selling homes simultaneously, though, you have a more complicated transaction on your hands. While you can’t guarantee that careful planning will mean a smooth process, there are several ways to make things easier. Here are seven mistakes you’ll want to avoid.
Waiting too long to prep your home for selling. Every home needs at least a little work before selling. Things like deferred maintenance, fresh paint, miscellaneous repairs, deep cleaning, getting the exterior in shape and pre-packing or getting rid of excess “stuff,” are just some of the things you may want to consider before selling. Some people wait until they find the perfect replacement home before they start the process but it’s never too early to start readying your home for sale.
Buying too big. This happens all the time. People overestimate their loan-ability. Just because you have been responsible and paid your existing home loan every month on time, don’t assume you’ll be able to qualify for a bigger loan to buy your dream home. Make sure you are pre-approved for your replacement-home loan first.
Working with too little cushion. You know what price your house should sell for. But what if the market softens? If you’re forced to take an offer that’s $20,000 less than expected, it could be a big hit on your down payment for your new home. Right-pricing with the help of a seasoned real estate professional is essential.
Failing to compromise. Your concurrent sale and purchase will be stressful at times, but you are not the only person who is feeling stressed in your transaction. For example, what if the buyers need an extra week of escrow because there was an issue selling their home, or the sellers don’t think they need to fix a leaky pipe for you. Whether you are the buyer or the seller, it is important to make sure that all parties in the transaction are on the same page to avoid delays in the transaction.
Using two different real estate agents. When you are selling your home to buy a replacement home, expect this already complicated process to get even more complicated if you’re juggling agents between your home sale and your home purchase. Simplify things by using the same agent for both transactions. One experienced REALTOR® orchestrating the process for both transactions will avoid many problems, especially if you want to have simultaneous closings of escrow.
Closing on a Friday. While you should work with your agent to determine the best timing, you will ideally want to finalize the sale of your current home first, and then close on your new one. Try to aim for closings within two or three days of each other, if not concurrently, and never close escrow on a Friday. If the county cannot record on the same day your loan funds, you would pay at least three days of interest on a home you don’t yet own officially nor have access to.
Not trusting your team. When selling and buying simultaneously, expect there to be approximately fifty people involved in the transaction. Hopefully for you, these people will work together like a well-oiled machine with one general purpose in mind - making it happen for the buyers and sellers. All of your questions and concerns are important, and your agent is your guide through what may be one of the largest financial decisions of your life.
Adapted from an article on realtor.com by Jamie Wiebe.
This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice.
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