The home buying and selling process can be overwhelming. For many individuals, it is even more complicated if they're trying to buy and sell homes at the same time. Buying a new home and selling your existing one involves dealing with a lot of paperwork, details, and people. Here are some things you need to know about buying and selling your home at the same time. It’s especially difficult to do this in a hot real estate market like we have in Austin. Don’t worry, we have you covered.
How to Sell and Buy a House in Austin, TX at the Same Time?
The act of selling and buying at the same time can be difficult, especially for those who are new to this process. One thing you can take note of is that this type of transaction happens all the time. In a 2019 profile by the National Association of Realtors, 71% of repeat homebuyers owned their previous residences, which means that they were likely both buyers and sellers during the transaction.
Despite the challenging process of both buying and selling at the same time and to take some stress out of the process, there are some ways to make this transaction as smooth as possible. Discover some tips for selling and buying a home in Austin, TX at the same time.
1. Assess the Market
As you assess the current market situation, it will help you set the right expectations before you search for your new home or list your current home. One of the important factors in selling and buying a home is timing though this will also greatly depend on the condition of the market you’re in.
What is a seller’s market? In a seller’s market, the demand exceeds the supply. There are plenty of interested buyers but only a few homes are available.
What is a buyer’s market? In a buyer’s market, supply exceeds demand. Home sellers have more competition and some homes stay longer on the market due to the low number of potential or interested buyers.
Researching about the current market you’re in will give you an idea of how long it will take for your home to sell or how long it will take you to find your new home.
2. Work with an Experienced Real Estate Agent
Working with a highly skilled and experienced agent will not just make the process easier and smooth, your agent will also navigate you through the complexities of the transaction. Selling and buying at the same time isn’t easy. Our team is trained to help you navigate through this tricky process.
Professional agents are trained to manage these types of transactions and will guide you based on current market trends. They are familiar with the ups and downs and hiccups you might encounter throughout the process. They can also provide solutions and advice as well as loan programs that can help you achieve this with minimal stress.
3. Prepare Your Current Home for the Market
Your agent will guide you throughout the process of preparing your home for the market. One of the first things you will want to do is to declutter and depersonalize your home even if you’re months away from listing your home.
Next is to have a home inspector check on your home for anything that can be fixed before listing it for sale. It’s better to find the issues now from your inspector than wait for the buyer’s. Get your home staged to create a warm and inviting atmosphere for buyers to picture themselves living in your home.
Once you’re prepared to list your home, your local Austin real estate agent will help you with marketing in search of buyers, listing open houses, and network with other agents to market your home.
The right local real estate agent familiar with the neighborhood and market will be able to put the right price on your home too. It’s also highly recommended that you use one agent for both buying and selling your home for they’re already familiar with the complexities of both deals and can negotiate better in your favor.
4. Talk to a Trusted Lender
It will be ideal that you will have a concurrent closing. Concurrent closing is a term used when you are selling and buying a home on the same day. Concurrent closing is the fastest way to sell your home in order to buy another home right away, however, taking the first step will depend on the market conditions.
If you’re relying on the sale of your current home for the downpayment of your new one, it will be a little more challenging. The best resort to this is to consult with your real estate agent and lender about your situation. Your lender will look at your current home’s value and how much you want to spend on your next home. They’ll also take a look and determine if you can get preapproval for a loan before you sell your current home.
5. Financing Options
There are different types of financing options available for selling and buying a home at the same time. First is the traditional mortgage. The traditional mortgage refers to a loan used to purchase a home and borrowing on fixed variable interest and making payments until the loan is completely paid off. Another type of option is a contingent mortgage which a clause is written into any offer that you make on a new home and will be voided if the condition isn’t met. However, contingent offers can be “bumped” by non-contingent offers and is not always financially feasible.
To make an all-cash offer on your new home, you must secure cash. If you don’t have liquid funds to cover the entire amount, consider getting a bridge loan where you can borrow up to 80% of your home’s value. However, a bridge loan is one of the most expensive options available which is also short-term and is an interest-only loan. Another drawback is that bridge loans don’t last more than 12 months and have higher interest rates.
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6. Get Your Finances in Order
Both buying and selling a home are most likely the largest transactions you will ever handle so it’s important to have it all lined up and calculated. Some of the things to consider in preparation include the cost of repairs, staging your current home as you prepare it for the market, setting up a cash reserve, over six to nine months of funds to cover you and your family’s expenses.
Don’t forget about your maintenance budget, remodeling, furnishing, landscaping, and the cost of renting if you decide to sell your home before moving to your new home.
7. Consider Seeking a Cash Buyer
Cash buyers are those who can purchase property with the money they have with no mortgage or loan required. Cash simplifies the real estate transaction and leads to faster closing and fewer complexities. It’s been common in this market for buyers to be backed by cash even if they’re getting a loan. Our Spyglass “Select Move Program” does exactly that and the details are listed below. If you are thinking of buying first and selling later, working with an instant homebuyer typically goes much quicker than the traditional listing process. However, be aware that this route can offer less than what you’d get from a non-cash buyer.
How Long Does it Take to Buy a House?
Beginning from where your loan starts processing, buying a home can take 30-45 days. According to the Ellie Mar Origination Insight Report, the average time to close a home purchase as of June 2021 is 51 days. The Closing process is a multistep process that can take time but the communication between agents, buyers, sellers, and lenders is clear, the process saves both time and money.
What is the Worst Case Scenario When Selling and Buying a Home at the Same Time?
In some instances, the worst-case scenario cannot be avoided especially if you’re selling your home in a short period of time and don’t have anything suitable to purchase. If you find yourself in this situation, you have some other options available. One of these options is to rent a temporary place such as a short-term lease. Renting a place during the process will allow you to search more comfortably and lessen the feeling of being overwhelmed.
Spyglass Select Move Program
Can’t finance before you sell? In this competitive multiple offer situation environment, cash is almost always king. There are so many people competing to win a bid for a property in Austin. Did you know that you can make a cash offer on a home even if you’re getting a mortgage?
Wait? What? Yep. That’s right, you can. With our Spyglass Select Move Program, we’re able to “loan” you the cash upfront to put an offer in and you can refinance right after you sell the home. Or, if you have a long enough escrow period, you can close the loan, even if it's backed by cash.
We’ve partnered with 4 different lending companies to get you options to help you purchase your home with a cash offer. This means that you’re much more likely to win in a competitive situation against other buyers. We’ve seen several situations where our buyers won the bid even when they weren’t the highest bidder.
Need to sell your home first? No problem. Our Select Move Program will get your home paid off while you’re selling it so that you can put a cash offer on a new home without having to make a contingent offer on the home you want to move in.
Why is a contingent offer bad for sellers? In this hot Austin housing market, multiple offers are very common. A contingent offer gives an “out” for buyers if they can’t sell their home. Most of the time when someone writes a contingent offer, they already have their existing home under contract. Sellers would much rather take an offer that doesn’t have that kind of contingency.
Our Spyglass Select Move Program prevents you from having to do this. It’s fairly easy, cost-effective, and gives you a competitive edge in this difficult, low-inventory Austin housing market. A no-brainer if you’re trying to buy the home of your dreams while selling your home at the highest possible price.
Buy a home with the confidence of cash! Check out how the Spyglass Select Move Program works. For any questions and inquiries, click here to contact us and speak to a consultant to learn more!