How To Buy and Sell a Home Simultaneously

Buying and selling a home at the same time can feel overwhelming, right? It requires careful coordination and planning. But hey, don't worry! With proper preparation and knowledge, you can make this complex process smooth and successful. In this comprehensive blog post, we'll explore some practical tips and valuable tricks to help both buyers and sellers navigate the dynamic real estate market while efficiently managing their relocation. So whether you're searching for your dream home or looking to maximize the value of your property, we've got you covered! These insights will empower you to make informed decisions and achieve your goals with confidence. Ready to optimize your real estate journey? Let's dive in!

Understanding whether you're in a buyer's or a seller's market is an essential first step. This type of market condition is determined by the supply and demand of homes. In a buyer's market, there are more homes for sale than there are buyers, giving buyers more power during negotiation. On the other hand, a seller's market occurs when there are more buyers than homes for sale, putting sellers in a stronger negotiation position. By recognizing these market dynamics, you can plan your strategy more effectively and set realistic expectations for both buying and selling outcomes.

Determining whether you're in a buyer's or seller's market can be a crucial task. You've probably heard that it's currently a seller's market, but what does that truly mean? The key lies in gauging the depth of the market by assessing the number of months' worth of inventory available. Let's break it down: if there are 30 homes for sale in your market, with an average of 15 homes sold per month over the past six months, you have two months of inventory. Generally, a balanced market falls within the 5-7 months range. Interestingly, at the time of writing this blog post, most markets in Ohio had less than two months of inventory. To put that into perspective, back in 2009, we had nearly 12 months of inventory.

In the current seller's market, let's focus on this aspect. In this type of market, it's expected that sellers will receive multiple offers and homes will sell above the listing price if they are priced and marketed correctly. When you're selling in a seller's market, you have the advantage, but when it comes to buying your next home, you lose that advantage. In this situation, it's crucial to present a strong offer. You'll be competing with other buyers, and including a contingency to sell your home first could be the deciding factor that causes you to lose out on a house.

In this scenario, it's recommended to list your house first. You can include certain requirements or contingencies that allow you to have time to find your next home:

1. List your home with the contingency that you need to find a home to move into. This allows you to accept an offer on the selling side and use that accepted offer to your advantage when making an offer on another home. You still have a home sale contingency in your written offer, but the seller can be assured that you already have a buyer lined up as soon as you find a home. If you don't find a home, then you don't sell. Many buyers will be willing to give you that time just to secure the house.
2. Sell your home with a specified amount of time to remain in possession of the property. If timed correctly, this removes your home sale contingency when buying. Your home sale closes, you receive the funds, but you can continue living in the house for an agreed-upon period while you search for another home. The disadvantage here is that you may feel a bit rushed to find your next home, but it does provide you with more time than usual.
3. Sell your home with an option to rent it back from the buyer for a specific period of time. This also removes the home sale contingency and gives you more time to find your next home. The rental rate is usually based on the buyer's mortgage loan costs. Depending on the terms of the rent-back period, you may need to obtain rental insurance as well.
4. Consider utilizing a service like homeward.com. This service allows you to purchase your desired home and sell your current home later. They provide funding for your purchase (for a fee) and then allow you to sell your home directly to them or list it on the market.
5. Another option is to explore a bridge loan. A bridge loan functions similarly to homeward.com, providing short-term financing until you sell your home and secure your mortgage.
6. If you have the means to do so, you can also choose to buy your next home first and list your current home afterwards. This means you would need to qualify for both mortgages and could potentially be responsible for paying on two mortgages if your home doesn't sell quickly.

Each of these options has its own advantages and disadvantages, but they all provide an opportunity to transition into your next home without having to rent or rely on the hospitality of friends or family during the interim period.

In a buyer's market, homes tend to stay on the market for longer, providing buyers with more negotiating power. They can expect discounts from the list price of properties that pique their interest. If you're selling your home in this scenario, it's crucial to set a competitive list price that appeals to the right buyers. As a buyer, you can take advantage of these market conditions to potentially secure reduced prices.

Conversely, in a seller's market, you should approach your transaction as a buyer first. Although you should still list your home before buying, finding a home becomes easier. You can even make an offer with the contingency that your home sells first. While this may impact the value of your offer, you may not face competition for the desired home.

Considering the current low inventory, whether rates rise or fall, the market will likely remain a seller's market for some time. The aging baby boomer population and the need for downsizing, along with millennials seeking starter homes, create a significant demand for affordable housing. However, constructing starter homes is no longer cost-efficient. Consequently, we anticipate a rise in condo construction to accommodate this demand. If you fall into this category of buyer, you may want to explore condo options.

Regardless of whether you opt for a simultaneous home sale and purchase or a different type of transaction, conducting thorough research and meticulous preparation are vital for ensuring a seamless transition into your new home. By dedicating time to careful planning and considering every aspect, from financing options to property inspections, you can make the entire process much more manageable and increase the likelihood of a successful outcome.