Buying and Selling at the same time…

What to know and avoid

 

Buying and selling a property at the same time can be a bumpy ride as you are standing at opposite ends of the same type of transaction. It’s a bumpy ride that not many people can endure to the end. If you have the courage to do so, and you will definitely need a lot of courage, there are some things you should know from the real estate professionals that will only aid you in the process.

 

Think about the current market

We always hear about a buyer’s or a seller’s market. This is especially important to consider when you are both buying and selling as you will probably be embarking on the two activities in the same market. It is best to get a professional’s advice as to what the exact state of the market is so you can make informed decisions.

 

A buyer’s market means that there are more properties on offer than there are buyers and buyers have the luxury of time and a negotiation advantage. The opposite is true in a seller’s market and the seller is advantaged. In a buyer’s market, it is usually better to get your property sold, before committing to buy as it will provide some security that your current property will sell and provide you with the funds that you need (if you do need the finances of your sold property to finance the purchase of a new one).

 

Sort out your finances

You need to work with a well-thought-out financial plan and know exactly what you can and can’t afford. Talk to your real estate experts about what the actual sale and purchasing prices are of homes in your current area and the new area you want to move into. More than just a financial plan, you also need to know what you are looking for in a new home and in what area you want to be located. It will only help you to smooth out the process and work more efficiently.

 

What type of mortgage can you get on the new property? Can you afford to foot two mortgages for a while? Do you absolutely have to sell first to have that money available for the new property? Can you afford to rent for a while? Answers to these questions will help you define your financial situation.

 

You’ll want to try and avoid having to juggle two mortgages, even if you can technically afford it, it adds stress that could quite possibly be avoided. If your current property doesn’t sell as fast as you thought it would, but you have already committed to a new property and the deal has been concluded, you might be left in a bit of a pickle. You could rent out one of the two properties to cover its expenses, but if you can also avoid this headache, it would be for the best. In an ideal world, the sale and purchase would be concluded at the same time, but that is rarely the case.

 

You do have various options available to you. If you get your current home sold, especially if you get and accept an exceptionally good offer, before you have a new one to move into, you could move into a short-term rental in the interim. You could also negotiate for an extended occupational right to the property to allow you a bit more time to close the deal on a new home. You could enter into a purchase agreement that is dependent on the sale of your current property. This might not be ideal for the seller of your new property, and they could decide to not sell to you if they know this is going to be a part of the deal. Whatever you do, don’t allow yourself to be pressured into a sale or purchase that will ultimately disadvantage you.

 

Plan and prepare as much as you can

We’ve already talked about planning your finances and about knowing what you want from a new property and home. Planning and preparing is about much more than just that though.

 

You want to avoid, as far as possible, being caught off guard. Whether it be a sudden move date, an unexpected change in the market, a deal that falls through, you aren’t approved for a mortgage, etc there are so many things that can happen in a property sale/purchase that it is almost impossible to plan for every eventuality. You can, however, try to think it through, talk to your real estate agent about your fears and worries, and get some peace of mind.

 

When you embark on the journey of selling, especially if you enter the house showing stage, pack up the non-essential items in your home so you can declutter and have your home looking its best for potential buyers. If your house does sell quickly and you need to move sooner than you thought, it will also be easier if you have already organized and packed up some of your belongings. Even though you cannot be 100% sure what will happen with a property sale/purchase, having a timeline can also be beneficial. This is even more true if you are moving to a new city. If you know you need to have your house sold and a new home set up by a certain date, it is easier to also set out a plan B should the sale or purchase not go through or take longer than expected.

 

Involve experts

In all of this, having an expert by your side that truly has your best interest at heart and values a personal relationship, is the best thing you can have. This will help you avoid any confusion and help you avoid making the wrong decisions or caving in to offers that disadvantage you.

 

Karis is a real estate agency where our relationships with clients are paramount and built on honesty, respect, and integrity. Finding you buyers and new properties that truly meet your standards and help you move upwards and onwards in life is what gives us a kick.