Buying a new home while trying to sell your current home can be challenging. However, with the right cocktail of patience, flexibility, and planning, it can certainly be done. Selling your old home before buying a new one is undoubtedly the easier way to go. But what if you find your dream home before you sell? While this is the trickier method and will require a little more financial finagling, buying before selling is possible. Have a plan in place, stay organized, and consider some options.
Often referred to as a home sale contingency, you can make your offer based on the contingency of your home selling. This contingency allows you time to find a buyer for your old house before moving forward with settling on your new home. If you cannot find a buyer in time, you have the option to try to extend the contract or to back out of the deal. If a “kick out” clause is in place, then the seller can still entertain other potential buyers and offers until you are able to remove the home sale contingency.
Are you able to afford both properties? If so, this is the safest option as it allows you to submit offers on new homes without having the stress that comes with a home sale contingency or taking out a new loan.
What if you sell before you buy? Selling your old home before you buy a new one is a more financially secure option. This way, you will know exactly how much money you have to spend on a new property. However, this method is not without its inconveniences. For instance, you may have to deal with the stress of moving twice within a short period of time and the inconveniences that come along with short term rental agreements.
Maybe none of these options work for you and you need to coordinate the closing of both properties on the same day. If you are like most people, you have accumulated many years of stuff in your home and moving out the same day the buyers move in is nearly impossible. Consult with your REALTOR® and ask about pre-occupancy and post-occupancy; these terms define themselves.
If the home you are buying is vacant, then you can ask to move in early, this is known as pre-occupancy. This can alleviate the hassle of moving twice. If the seller is agreeing to pre-occupancy, you may have to pay a “rental fee” for the days you occupy. You are also responsible for insurance and utilities for the property. Post occupancy means that you remain in your property for a period until you can move into your new home. You may also end up paying a fee to the new buyer for staying the extended time. This allows you more time to move and prepare your home for the buyer.
As if buying and selling simultaneously isn’t already stressful enough, there is quite the task list that comes along with vacating your home. This includes scheduling your insurance to be cancelled after you close, switching all utilities out of your name, and having your home cleaned and ready for the new buyer. If only there was a professional to help guide you through from beginning to end of these stressful transactions…Take my advice and don’t attempt this without the help of a REALTOR®. Until next week!
Eve Leombruno, 2023 MBOR President