No matter the state of the market, buying a new home while simultaneously trying to sell your current residence is a stressful process. If the timing is off, you could find yourself with extra bills or no house to live in.
Identify the Market
There are two types of markets in real estate: a buyer’s market and a seller’s market. The difference is found by assessing supply and demand. If the supply is greater than the demand, that’s a buyer’s market; this means that there are more houses on the market than there are homebuyers. A buyer’s market is great for buying a home as you will likely find a residence for a lower price given the decreased demand.
The reverse—a greater demand for homes than there are homes available—is a seller’s market; this is the ideal time to sell your home as there are typically more buyers interested in a single property, often resulting in bidding wars that can prove more profitable.
If you were only conducting one transaction, you could wait for the ideal market before taking action, but attempting to buy and sell at the same time leads to some complications. If you are in a buyer’s market, you could make an offer for your prospective new home with a sale and a settlement contingency while also requesting an extended closing for your own home, giving you additional time to sell. In a seller’s market, you can request a rent-back agreement to allow yourself more time to find and buy a new home. Understanding the market fluctuation and how to best navigate this will help limit your stress.
Hire a Skilled Agent
Having a reputable, experienced real estate agent on your side will immensely help the process. They will be able to provide expertise regarding market fluctuation in addition to negotiation, strategy, and transition. It’s also important to be thorough in your search for the best suited and most qualified real estate agent in your area.
Know Your Financial Situation
Whether you plan to prioritize buying or to sell first, it is necessary for you to discuss with your family and financial advisor so that you are well aware of your financial capabilities. Identifying your home’s value as well as how much equity your home has are critical parts to this process. If you plan to buy before you sell, you should look into support options like contract contingencies and bridge loans to help ease the financial burden.
Trying to buy and sell homes simultaneously can certainly be stressful, but with the right preparation, research, and resources, you can limit the emotional strain as well as the financial stress that the process can entail.