How to: Selling and buying a home at the same time
Do you own a home but are looking to relocate to a new town, find a bigger place or retire and downsize? You’re not alone. Repeat homebuyers make up the majority of home sales. If you don’t want to sell your home without a permanent place to move or have two mortgage payments at once, you may choose the option of selling and buying a home at the same time.
What to know about buying and selling a home around the same time
Buying and selling a home simultaneously takes careful coordination and planning. We’re here to lend a hand so you’re not stranded in limbo between two homes. Learn how to navigate and successfully sell and buy a home around the same time, including tips to make the process go as smoothly as possible.
Reasons for buying a home while selling your own
Besides the obvious reason of needing a place to live, one of the main reasons for buying a home while selling your own is not wanting to take on two mortgage payments at once. Other reasons you may choose this option:
- You need the equity from your home sale to cover a down payment and closing
costs for a new home
- You may not be able to acquire a new mortgage before you sell
- You’re in a competitive market and would like to make an offer on a new home
that’s not contingent on selling your existing home
Can you buy a home while selling your own?
Yes, you can. Some sellers choose to add a “subject to finding suitable housing” contingency on their listing agreement. Be careful with this approach. Making your home sale contingent on purchasing another home can scare off potential buyers and reduce the chances of getting the best price for your home. That’s because some buyers don’t want to invest time and money in the homebuying process only to find out the sellers can’t sell.
Similarly, sellers don’t want to accept an offer only to find out soon after that the buyers can’t buy. While buyers may prefer to purchase a home on the contingency of selling their home, they may have difficulty finding a seller to accept this kind of offer.
How to buy a home while selling your own
As an alternative, you may choose to buy a home first and then put your current home on the market, hoping that you’ll sell it quickly. But with planning and coordination, there’s a better path.
Don’t wait until you’re ready to buy to get pre-approved. When you take the steps ahead of time to meet with Guild Mortgage and get pre-approved, an expert loan officer will review your financial situation in depth and determine what homes you may be able to afford.
Hire a knowledgeable real estate agent
Take the time to research and interview agents until you find an experienced partner familiar with the neighborhood or location where you would like to move.
Research homes and neighborhoods
Do your research before putting your home on the market. Start by creating your “must-have” and “nice-to-have” wish list of features for your new home. Then attend open houses in your targeted neighborhoods to get a sense of what’s selling, the location and how a home in your price range might compare to others in the area.
Get your home market-ready
By preparing prior to listing your home, you may increase the chances of selling quickly and receiving a solid offer. Identify and address repair issues, clean and declutter to stage your home for showings.
Consider a Bridge loan
If you’ve found the perfect new home but still need to sell your current one, moving up may be easier than you think. A Bridge loan is a type of short-term financing that lets homebuyers borrow money using their existing home as collateral. Use Guild Mortgage’s Bridge loan program* for your down payment to decrease the stress of a new home purchase. This program allows you to make an offer on your new home before completing the sale of your current home. Other benefits include:
- The opportunity to make a non-contingent offer on a home
- Use equity from your current home to move up and buy the next home
- Great option for anyone who needs to relocate for work or to retire
In a low-inventory market, writing a non-contingent offer could get you the winning bid! Let’s talk about your options.
*Program not eligible in the states of Texas or Virginia.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.