The Art Of Buying & Selling A Home At The Same Time

Selling and buying a home at the same time brings up questions about how it will work. In the real estate market, we do not see many people buy and sell real estate on the same day. But this does not mean that it is not possible. It requires a bit of luck and a good amount of work. If you follow these tips below, you'll be able to navigate through this with ease.

Extend the settlement period on the deal

Two houses being settled simultaneously at the same time might sound great, but in reality, it is practically insurmountably difficult to attain in reality. Because both settlements are correlated with each other, if one party is delayed, it can cause regrets. A great way to reach a simultaneous settlement is by having an extended settlement period.

For instance, if you sell your home first, you can set an extended settlement period of three months to six months in the contract as a condition of sale. During that period, you can buy a new home and complete its settlement.

By buying first, you can often request an extended settlement period from the seller. This should give you enough time to sell your existing home and do settlements. The settlement period hinge on how flexible the other party is. You can provide the party an additional incentive or use good negotiation skills to generate a great outcome.

Getting a bridge loan

If you have the money, you may consider applying for a bridging loan before purchasing a new home before you sell your current one. This loan is called a bridge loan, as it serves as a bridge between buying a new home and selling your home. A bridging loan is a type of interest-only loan on your existing debt. Usually, you don't make the payment in full during the bridging period and interest on your preexisting debt accumulates. Then, the interest is added towards your final loan amount after your property sells. 

When selling and buying a home at the same time, a bridging loan makes the entire idea easier. In most cases, you will need to have a fair amount of equity in order to obtain a bridging loan. Many lenders have various conditions and utilize varying techniques for deriving the bridging loan amount. It is very important to speak to the lenders ahead of time and do a test to determine whether you will be able to supply the loan.

Add a condition that is listed as subject to completion of sale to the agreement

Here, you buy a house subject to the sale of your own home by making particular stipulations in the contract. You will only have to come up with the money after selling your previous house. It is vital to steer clear of the bother of having to search for a place that you can rent prior to moving to a new residence. So, you are saving money and time by arranging a place to move-in after the sale of your existing residence.

Another important reminder of the technique to keep in mind is, the seller may still have additional buyers who are not requiring the merchandise unless your bargain is extremely appealing. Therefore, you may have to make a compromise that ensures the seller waits. You may schedule certain milestones in the contract to provide the necessary level of confidence to the buyer, such as setting a certain deadline for unconditional agreement, another date if the sale must put the contract, etc. Taking any action inconsistent with any of these targets, either party can terminate the terms of the agreement immediately.

The sale of a home and a buy could influence your budget significantly, particularly if you aren't well versed in both financial matters. Ask us how we can help you make this process as smooth as possible!