Buying a home in Hampton Roads is exciting, whether it’s your first home or your fifth. But, while the purchase you make may be a real adventure, many owners put their home on the market, while also trying to find a new house.
As a homeowner, you can try to sell while looking for something new, but, it can get a little tricky. Here are a few tips on how to make this process as smooth as possible.
Evaluate your local market: It would seem like selling your home, before putting an offer on a different one, would be the best option when it comes to buying and selling; but, it can really depend on the local real estate market. If you have the time, research the market in your city or desired area. This will let you know whether it’s a buyers or sellers market. The type of real estate market in your locale can really dictate whether or not the process will be quick or drawn out.
The general rule of thumb is, to sell first, in a buyer’s market and buy first, in a seller’s market; but this isn’t always the case, since every experience is unique. You can really get an understanding of what might work best for you by talking to your trusted real estate agent, who will know the market and will be able to provide insight on current trends.
Understand your finances: When it comes to buying or selling a house, finances are a huge part of both transactions. Whether you’re looking to sell or looking to buy, knowing your current financial situation is vital to your next steps.
If you currently own, one of the first steps you should complete is, researching the amount of equity in your home. You'll want to know how much your home will sell for, in your current real estate market. Don't be afraid to have an inspection done, to better understand what repairs or work may need to be done on your house, as this will help you understand how much you may need to deduct from the possible sale price, or, any concessions you may need to make for a future buyer.
If you have a mortgage loan, you will absolutely want to know how much equity you have in your home. The equity that has built up could be enough for a down payment on another home. It’s important to remember, though, that any equity is only accessible, after closing.
There are pluses and minuses, of both selling your home before buying, and, buying a home before selling.
Utilize a contingency: Ideally, you would sell your home on the same day as buying a new one. Since this is not the case for most buyers and sellers, adding a contingency into the contract can be very helpful. It's important to note that the term, 'contingency,' can have different meanings throughout the U.S. In this case, a "contingency" is referring to a provision for an unforeseen event or circumstance, when it comes to the financial ability to close a purchase sale.
If you want to buy before selling, make an offer with a home sale contingency, which means you will buy the new home, once your current residence sells. You can also request an extended closing, if you’re certain your home will sell, which extends your closing past the typical standard of 30 to 45 days.
If you want to sell before buying, you can make an offer with a settlement contingency. This contingency works when you have an offer on your home and you want to buy another, which means you'll buy the home contingent on the sale of your existing home.
If you happen to sell and haven't made an offer on another home, you can sign a rent-back, which means you go through with the sale of your home, but you rent the home back from the new owners for a specific time, anywhere from 60 to 90 days, giving you time to find a new home or make other living arrangements.
There are pluses and minuses, of both selling your home before buying, and, buying a home before selling. Remember to do your research beforehand, consult your agent on your local real estate market, and, if you need to, include a contingency in your contract.