Buying and selling a home used to be an easy proposition. The interested party contacted an agent and listed their house on the market. They began to look for a new home. When they received an acceptable offer on their home they proceeded to make an offer on the new home they wished to purchase. If they wanted to lock up a home until their home sold they wrote a contingency clause into their contract that voided the contract if their home did not sell in a certain period of time. This rarely occurred. Financing was easy to come by, and the real estate market was hot.
Today the real estate market is much different. Pitfalls that were once cleared with ease now cause deals to fall apart at the worst possible moment. To successfully execute a simultaneous buy-and-sell there are several tips that savvy buyers/sellers need to know and should keep in mind.
1. Meeting with the agent who will be negotiating on the buyer’s/seller’s behalf is absolutely vital. Your agent is knowledgeable about current market conditions and will be able to apply this knowledge to pricing your home appropriately for the current market. They will also give advice on improvements that can be made to help the home sell. The expected sell time of a home will be important in the next step.
2. Meeting with the mortgage officer very early in the selling/buying process is also important. They will have information about any possible problems that could come up. They are capable of working financing magic if given time. They also will be able to tell the buyer exactly what they will be able to afford. That way no time is wasted looking at properties that they cannot afford. The mortgage officer is essential to making sure the timing of the buying and selling process is doable.
3. It should be determined when move in and move out will occur and if it is feasible for both to occur on the same day. Putting together a rent back agreement or early move in agreement is a good idea. Sometimes closings do not occur on time, and it is nobody’s fault.
4. Gaps will occur. It is important to have a back-up plan in the event that escrow does not close in a timely manner. The buyer/seller might find themselves making double payments for a few months. Having a cash cushion is very important. If it is not possible for the buyer/seller to build up a cash cushion, simultaneous closing might not be a good idea. It might be best that they sell their house and then rent while looking for a new home.