Are you considering selling your home and buying a new home? If so, you have two options: sell your current home before buying a new one or buy a new home before selling your current home. This can be a complicated decision. Whichever way you choose to proceed, you will want to have a solid plan and steady cash flow to keep the conveyancing process running smoothly. The first thing you should do is reach out to your real estate agent and lender to discuss your options, as they’ll be able to work with you on strategy and timing. Beyond that, the following are a few considerations when buying and selling a home simultaneously.
Selling Your House Before You Buy
From a cash flow perspective, it is more convenient to sell a house before you buy another property. Not only will you know exactly how much you can afford to spend on a new home, but also you will already have the funds available to close.
Choose your settlement date wisely. Ideally, you should settle and close your new property on the same day. If this is not possible, be sure to plan in advance where you’ll stay until you can move into your new home. You might:
- Opt for a short-term rental
- Stay with friends or family
- Ask your buyer if there is any flexibility – would they be willing to negotiate the settlement date?
Unless you can sell and move into your new house on the same day, don’t forget that you may need to have a place to store your household furnishings, which you should arrange in advance.
Buying a House Before You Sell
Alternatively, you can buy a new property before you sell your current home. The advantage of this option is that you have somewhere to move immediately, and you only have to move once (versus moving into somewhere temporarily between houses).
Unless you have the funds available to buy the new property up front, your lender may recommend a bridge loan to tide you over until your house is sold. In this situation, once you sell your house, you use the funds to pay off the short-term loan. It’s important to discuss all options with your lender as some do not offer this option.
Keep in mind that you’ll also need money to cover closing costs, inspections, moving, and other related expenses. Unless your home sells fast, you might overstretch yourself financially. Spend time drawing up a contingency plan before you buy a home so that you’re as prepared for anything unexpected.
Another option for both buyers and sellers would be to ask for a delayed occupancy if you need additional time to move. If the delayed occupancy is going to be a considerable amount of time, this could result in having to pay rent; however, for a short amount of time there may be no cost at all.
Our Team is Here to Help
Buying and selling property can be stressful, but the process can go much smoother with the help of a great real estate agent, lender, and closing company. At Attorney’s Title Group, we aim to make every closing as stress-free as possible. We will work closely with your agent and lender throughout the process to ensure a smooth transition. Give us a call at (501) 734-2233 or contact us online if you have any questions.