Both buying and selling a home are equally stressful, but what about when you are trying to coordinate both at the same time?
There are a lot of moving parts, and the agents involved work together to ensure the smoothest possible transactions for our clients. If you are selling your home and want to settle on a new home purchase at the same time, here are some things to think about to make your move as smooth as possible.
Truly simultaneous settlements are rare these days, especially when financing is involved. Regulations put in place to protect consumers have made simultaneous settlements very difficult to pull off. Concurrent settlements occur when a party is selling and buying properties at about the same time, usually within a couple of days of each other. If you wish to settle on the sale of your home and the purchase of a new home back-to-back, the best scenario is to work with the same conveyancer for both transactions. Usually, the sale of your home is settled first, your mortgage is paid off, then the purchase of your new home is settled.
Selling your home ahead of buying is the most risk-free alternative, as neither transaction is conditional on the other. However, this requires your family to make an extra move and have a place to live while you wait to settle on a new home, so in terms of convenience and expense, it’s not always the best scenario. If you have the ability to secure a short-term rental, or to put your belongings in storage and stay with family, then you can enjoy the luxury of taking your time to look for and settle on your new home. One option that sometimes works out is to rent your home back from your buyers while you wait to settle on your purchase. This works well when the buyers are not in a hurry to move in themselves and you can agree on a timeframe for you to remain in the home.
Buying ahead of selling is a dream in terms of convenience. You can take your time moving, and maybe do some renovations or decorating before you move in. But will you qualify for a new mortgage without the condition of selling your existing home? If you can swing the mortgage, or are paying cash, it may be a great option for you. Remember to realistically consider how long you can afford to maintain two properties—with maintenance costs—in case it should take you longer than expected to find a buyer for your present home. In this scenario, you may want to rent your new purchase back to the sellers or list it as a short-term rental while you wait to settle on the sale of your existing home.
Consider your buyers and sellers carefully when trying to coordinate a sale and purchase within a short amount of time. The last thing you need is a seller or buyer who is displaying signs of being uncommitted to the deal. While no deal is guaranteed until all the documents have been signed and you have an unconditional contract, when you need a purchase or sale to coincide with your schedule, you should carefully evaluate who you sign a contract with. A contract with special conditions on other deals going through, a lender expressing doubt about final financing approval, a low deposit, buyers asking for unreasonable repairs or allowances, or sellers whose moving plans are questionable are red flags that your deal could fall apart.
Need some guidance on buying and selling at the same time? We’re here to help! Give us a call on 4031 9222 and we can walk you through the process to make your home transition smooth sailing.