Whether you’re looking for a bigger home for your family, a home in an exotic location, or just something interesting down the street, moving is an exciting time. However, if you currently own a home, it can also be a source of stress.
Is it better to buy a home, move, and then try to sell your old one? If so, you could put yourself in a financially strenuous situation – and there’s no guarantee your previous home will sell quickly. So then, should you sell first, then look to buy a home? If so, it could leave you in a tenuous position; if it takes months to find a new house, what will you do?
Tips for Selling a Home While Buying Another One
Fortunately, with the right mindset and the right approach, you can sell a house while buying another one with relative ease.
Let’s start with a look at the financial side of the equation.
- Plan your finances well in advance. Try to forecast your finances and estimate your costs conservatively, planning your finances well in advance. How much do you need for a down payment on the new home? How much for closing costs? What about moving costs and other expenses? Do you have this money available, or will you need an injection of cash to meet these needs? Bridge loans may be able to help you here, but what kind of impact will they have?
- Assemble a team. Financial decisions will be much easier to manage if you have a robust team working on your behalf. Work to find a good real estate agent, a good loan officer, and financial advisors to help you think through your circumstances and evaluate all options.
- Consider the market. The conditions of the local real estate market should play a role in determining your timing. For example, if it’s a seller’s market, homes will be sold reliably and in high volume; you won’t have to worry about whether your home will sell quickly, so you can strongly consider buying first. The reverse is true in a buyer’s market, favoring selling the home before moving forward.
Of course, you also need to think about timing.
- Understand your biggest priorities. Think about your biggest priorities in this transition. Are you concerned with getting the most favorable financial deal possible? Or is it more important to get into a new home as soon as possible? Outline and consider your priorities before making any big decisions.
- Be prepared to negotiate the timeline. When selling a home or buying a home, you’ll have some influence in dictating the timing of the transaction. For example, you may sell your home with a leaseback agreement that allows you to still occupy the home until you find a new one.
- Create a backup plan. Your best-laid plans may go awry. If you can’t find a home as quickly as you think, or if you’re unable to sell your home when you move to a new one, what are you going to do? Put a backup plan in place.
- Anticipate timeline disruptions. Be prepared for some disruptions in your timeline. Remain flexible and try not to panic. When the variables change, return to your outlined plan and make adjustments.
Don’t forget or underestimate the stress you’re likely going to experience while navigating these transactions. It’s important to keep your mental and emotional health in check.
- Think and plan ahead. The further ahead you plan and the more thoroughly you think, the better. This will give you more time to think through all your options and more time to respond to new variables you didn’t anticipate. You’ll also feel less pressure, leading to less stress overall.
- Understand that things can (and will) go wrong. The planning process will prevent some issues and allow you to respond appropriately to others. But no matter what, you’ll likely experience some hiccups and disruptions during the course of your exchanges. If you’re prepared for this, it won’t impact you as much.
- Talk to experts. You’re only one person – and you may not have much real estate experience. You can feel less stress and make a better decision by talking to many experts. Get their perspectives and tap into their experience to get to a better position.
- Take things one step at a time. This may feel overwhelming, but it can still be reduced to easy, manageable steps. Always take things one step at a time.
No matter what, you’re going to face some hard decisions and some stressful times. How you manage your choices and your efforts will have an impact on your finances and wellbeing for years to come – but don’t let that intimidate you. This is well within your control.