How to simultaneously buy and sell
Dear Phyllis,
I am seeking advice on buying and selling simultaneously in this crazy market. We know we can sell our home quickly, as the homes in our neighborhood immediately sell and usually over the asking price. Last month, we found a home we really loved. But the seller would not accept our offer because it was contingent upon our home selling. I can’t believe we are the only ones in this situation. How can we sell our home before we are certain of finding another? I appreciate any guidance you can offer on how to simultaneously buy and sell. Puzzled
Dear Puzzled,
This is a common dilemma. While many retirees who are downsizing have the capability of buying a home without first selling, most homeowners need the equity from their home sale in order to move to a larger home.
Unless a home has been on the market for a while with only low offers or none at all, you will not have much success in having a home seller accept an offer contingent upon the sale of your home, which is not yet in escrow. Of course, there are some rare exceptions; perhaps the seller doesn’t want to close escrow for several months.
However, you can buy and sell at the same time.
First, meet with a real estate agent. Then, review your options together. The most conservative option is to sell your home contingent on closing escrow on your next home. Because you live in a desirable neighborhood, you can attract a buyer who accepts this contingency. However, not every buyer will agree in a competitive market.
Once your buyer removes their contingencies, you can then submit a strong offer on your next home. At that point, you can make your offer contingent on the successful close of your sale.
Next, coordinate timing carefully. Ask your Realtor to leave at least two days between escrows. This allows time for funds to transfer securely into your new escrow.
Another option is to sell your home and negotiate a rent-back period. For example, you can request up to three months of occupancy after closing. This gives you time to find and close on a replacement home. However, this option does not guarantee enough time in all cases.
Finally, you can consider bridge financing, also known as a swing loan. These short-term loans typically last about six months. If you have sufficient equity, you can secure the loan against your current home. Then, you can use the funds as a down payment on your next property.
The good news is that there are options. Buying and selling simultaneously can be done with careful planning and the right Realtor.
Thank you for reading my real estate Q&A! Best of luck to you.
