Plenty of people find themselves buying and selling a home at the same time. But knowing that others have gone through the same stress doesn’t make it easier at all. The stakes are very high. If your home buyer backs out, you do not have any cash to land your new home! And if your own purchase falls through but your current house sells, you will be homeless!
1) Waiting too long to prepare your home for selling
Every house needs a little work before selling. You may need to fix broken decking, repaint some scratched walls or add grout in a hardly used bathroom. Do not wait until the last minute to begin this process, otherwise you can end up in a bind.
2) Don’t skip the backup plan
When you are buying and selling at the same time, the amount of moving parts doubles. If any of those parts get jammed or stuck, it can throw off both of the transactions. You should keep your emergency fund stocked. You might simply need a hotel for a week, but you might also find yourself looking into rentals for a short time in a best case scenario.
3) Purchasing too big
One of the biggest mistakes that simultaneous buyers and sellers make is the same one that many first time home buyers make. They do not get pre-approved on their new home loan. Pre-approval is necessary because it puts a stop to unrealistic dreaming by telling you exactly what size of house you can afford. Home buyers assume that with a large down payment and increased income, they will easily qualify for a bigger home loan.
4) Working with too small of a cushion
You know what price your home should sell for. However, what if the market goes bad? If you are forced to take an offer that is twenty thousand less than expected, there goes the down payment on your new house. If you are hoping to use the entire sale price as a down payment on another house, you should move forward with the assumption your house will sell for less than expected.
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5) Failing to compromise on the home
You shouldn’t forget that you are not the only human in a stressful situation. The person selling your dream home and the home buyers under contract for your current place are all probably stressed as well. So you need to keep that in mind when issues come up. For instance, if the home buyers need an extra week of escrow because there was an issue selling their house, or the home sellers do not think they need to fix a leaky pipe for you.
6) Using two different real estate agents for your home
You should expect this already messy process to get even messier if you are juggling agents for your listing and for buying a new house. You can simplify things by using the same agent for both transactions. If you are remaining in the same area, you might also meet and like an agent who works exclusively with buyers or sellers, but not both.
7) Closing at the end of the week
While you should work with your agent to find the best timing, you should ideally want to finalize the sale of your current house first. Afterwards, you would want to close on your new one. You need to try to aim for closings within two or three days of the other and not on a Friday.
Do you have a question about home buying mistakes? Call the Reed Team today at 949-392-6400!