Worried about how to sell and buy at the same time? It’s okay: I get this question from just about every client who is thinking about selling:
“How can we do this so that I don’t have to move twice? Is there any way to make it work so that we can sell and buy at the same time?”
If you are like most people, when you sell your home, you need to find your next home at the same time. It can be an intimidating process to consider, especially if you have never done it before. (And I know there are a lot of you out there who bought new construction for your first home. So this might be the first time you’ve worked with a Realtor, too!)
What’s the first step if I want to buy and sell at the same time?
The process tends to work best when you get your home on the market and under contract before you make an offer on the home you want to purchase. This puts you in a stronger negotiating position as it takes away some worry for the sellers of the home you want to buy–they don’t have to pull their home off the market to wait for your house to be listed for sale and go under contract. And you are in a better position to get the price that you want. (You could make an offer first and use a home sale contingency, but in a seller’s market that isn’t likely to be accepted.)
The good news? The way that our purchase contracts are written, you can use clauses to protect yourself through the transition. Afraid your home will sell too fast and you can’t find one you like? Yup, there’s a clause for that. Worried that the buyer for your home might default on the contract and you’ll be on the hook for your new home? Also a clause for that. Depending on your personal situation and goals, we can utilize different pieces to make sure that this is stress free and (most importantly) doesn’t obligate you to more than one house at a time, unless that is part of your plan.
(I’m going to explain how these clauses have worked for our clients. In Virginia we fill out the contract forms on behalf of our clients. Please note that I am NOT an attorney, nor am I providing legal advice. If you want the name of a few different real estate attorneys, I can provide you a list.)
The Home of Choice Contingency: “Hang on a minute, I need to find a home before I say yes.”
This clause is for when you get an offer on your home, and you want to find one to buy before agreeing to sell your current home. The Contingent on the Seller Purchasing Another Home clause gives you some time, typically a few weeks, to ratify a contract to purchase your next home. If you can’t find a home you want to buy in the specified period of time, you deliver notice to your buyer to void the contract. This clause is included in the contract for the home that you are selling.
The Coinciding Settlements Contingency: “I’m not buying this if my house doesn’t sell.”
The Settlement of Buyer’s Property clause is used as part of your purchase contract. You can use it to make your purchase contingent on the settlement of the sale of your current home. Meaning, if something happens and the contract on the home you are selling falls out, you are not required to purchase your next house. You can declare your purchase contract void at that point.
What about buying before I sell?
You may be able to buy your next home before selling your current one. It just depends on your financial situation. We’d recommend your first step be talking through the options with a lender. There are special financing options out there that could give you the flexibility to purchase before you sell.
You can also include a provision on the contract of the home you are selling that would allow you to rent the home back from the new purchasers for a period of time, typically up to 2 months. Depending on the current market conditions, this could cost somewhere between absolutely nothing and the new purchaser’s ‘carrying costs’ (mortgage, taxes, and any HOA/Condo fees.)
We can definitely simplify this process to minimize your risks. Trying to sell and buy at the same time is not as hard as you might think! If you are considering a move, we’d love to chat about how we could help make it all work. And if you have any questions on the process, that’s what we are here for! You can email us at firstname.lastname@example.org or text/call at 571-233-5495.
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