By
Nicole Foster
If
you thought that the processes of being a first-time home buyer was complicated
then just wait until you join the ranks of repeat buyers! The majority of
people will need to sell their current home in order to qualify for financing
to purchase another property. Paying two mortgages each month is not something
that everyone is in the position to attempt or sustain for very long. I am often asked how this process works and I
know that there are even more people who are curious but are not asking me,
because the very thought is so overwhelming
with helping people buying and selling at the same time.
Using
one Realtor® to assist you with both the sale of your current property and the
purchase of your next one can help to streamline communication and expedite the
overall process. Even the most experienced and top-notch agents will have only
so much control over the many variables which will need to be synchronized and
move in concert, but together it can be accomplished!
Buying
Your
Realtor® will help you to identify the range of market value for your current
home, which combined with other factors will determine how much you will be
able to afford. Explore what your financial position will allow you to consider
doing with a trusted lender and weigh the pro’s and con’s of each option. There
are inherent pressures that will inevitably come with each decision, so you
will need to prepare yourself for how the byproduct of your decisions will
impact your judgement, ability to negotiate and your motivation. If you are
carrying two mortgages, will you feel inclined to settle for less on the sale of
your current property? How will you be competitive when buying if you find
something you really want? Selling your current property then moving into a
temporary rental will make your offering power much stronger as a buyer, but it
may not be the most cost-effective option because moving incurs expenses and
you will be doing it twice. For many it is not only the expense but also
impractical to store their personal property often elsewhere and provide the
necessary resources for two moves.
One
of the instruments available to us is to make an offer which is contingent on
the sale of your current property. This will allow you to look for and make
offers on properties of interest while staying in your current home. Some people do not feel comfortable having their
current property listed until they have found suitable housing, out of concern
for being temporarily displaced and not wanting to move twice. If you have
decided to wait until you find a suitable property before listing, the seller
will most likely want to know the details surrounding the upcoming sale of your
current property including: Where is your property located and which agency
will you be listing with? What will the list price be, and do you have a clear
marketing plan in place to get a quick contract? If the seller is willing to
work with you during the sale of your current home then you will need to be
prepared to get your home on the market typically within 5 calendar days of the
agreement, so working with your Realtor® to develop a strategy in advance is
essential. In some circumstances an
agreement can be negotiated with the buyer of your current property to allow
you to rent back or remain in the home for 60 or 90 days while you continue to
search, which can help to relieve a bit of pressure.
Selling
How
will being under contract as a buyer impact my negotiating ability as a
seller? What happens if I get a contract
on my house before I find something? Will I feel rushed into purchasing a home
that I otherwise would not choose? Having a very clear Plan B or worst-case
scenario plan will help to give you a bit of space and relieve some of the
pressures when making tough decisions. If you are purchasing a newly built home
or build package you may want to have an idea of what you are going to do
should inclement weather or labor shortages cause the process to fall behind
resulting in being temporarily displaced. You might be able to negotiate a
certain amount of time to secure suitable housing, but you are then requesting
a concession so it may cost you in other areas depending on the buyers’
necessary timeframe to close and move in. Your Realtor® can help to reviews the
pro’s and con’s of disclosing this strategy when listing or waiting until
negotiations with buyers. If you are under contract on the purchase of your
next property you will need to be prepared to price your home more
aggressively. Often you will be provided 30 days to get a contract on your
current property and an additional 30-45 days to close depending on the
financing of all parties, but these are terms and conditions which will need to
be negotiated.
One
of the most challenging maneuvers in this intricate dance following sucessful negotiations is to keep the
timeframes moving along for both Property #1 and Property #2 concurrent and
parallel on things like building inspections for both homes, negotiations for
repairs and appraisal inspections for both homes. Scheduling the necessary
professionals, how much they will cost you and understanding what their
turnaround time for reporting will be is absolutely critical. Your Realtor® will assist with all of these
details or handle them on your behalf. With grace, a certain amount of skill
and an insane amount of luck; more often than not, we are able to hold
back-to-back closings at the same table on the same day for both properties,
but it is always a good idea to discuss what you may need to do in the event of
a delay on either side.
Nicole Foster became
licensed in 2005 and is a Broker with Locations Real Estate Group in Falmouth
and resides in beautiful Windham with her family. Call, text or email with any
real estate related questions.
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