A Step by Step Guide when Buying and Selling.
For whatever reason, you’ve decided it’s time to buy a different home. Maybe the family has grown in size or in numbers? Are the kids off to college? A new job on the other side of town or your home is just too big. The issue is you need to sell your current home first. Where to begin? Can I buy a new home before selling my current one? Will I have to rent a place for a few months before I can move into my new home? There are many moving parts when trying to buy a home while selling your current one. You do not want to be homeless during the process and you do not want to have to move into a short-term rental. Nobody likes moving. Why do it twice? That is why we have put together this step by step guide on how to do a simultaneous close of your current home and your new home. These are the steps and the order we advise our clients to take in order to make the transaction as smooth as possible.
Step 1. You have to do the math
The starting point is to find out how much your current home is worth, what repairs or staging is needed, and what will be your proceeds of the sale your home. Talk to a Realtor and have them do a market analysis for you and determine a sales price of your current home. Have them calculate an estimated net sheet with all the closing cost, Realtor fees and mortgage payoff to give you an idea of how much money you will walk away from the sale.
If you would like to learn how MJD Group with Platinum Service Realty can save you thousands selling your home click HERE
Step 2. Speak to a lender
Now that you have a good sense of how much cash you will have on hand for your new home purchase, you are ready to speak to a lender. Here you will find out home much home you can afford. You can go over the options of different loan programs available and determine a monthly mortgage payment you are comfortable with. Once you are approved for your new home it’s time to see what is on the market.
Step 3. Time to take a peek.
At this point, you have a solid understanding of the numbers. You have an idea of what you will net from the sale of your home and you’ve discussed with your lender a comfortable purchase price for your new home. It’s now time to see what is on the market. Now I offer a little caution with this step. Chances are you are not ready to purchase a home at this step. You are simply previewing homes at this point. The purpose of this step is to be confident that you will be able to find a home within your budget once your home sells. Have your Realtor set you up on a custom home search and set some time to preview a few homes. a good place to start looking for your new home is HERE
Step 4. Get you home on the market.
This is where it gets exciting. You have prepared your home for sale. You have previewed the current market. Now it is time to get your home on the market. This is where you lean on your Realtor. Your home might sell in 2 days or in 2 weeks. You have to be prepared for both and you need a Realtor that knows how to negotiate the sale for you while being mindful of your needs to find another home.
Step 5. The Offer.
The average escrow process in Phoenix market is about 30 days. The escrow process is the time between a you accepting an offer and handing the keys over to the new owners. Everything is negotiable in the purchase contract including the close of escrow date. That is why we always suggest a 6 week close of escrow for two reasons. The first being it gives you more time to find and purchase your next home. The second reason is the first 10-20 days of the escrow is the “Due Diligence” period. This is the inspection period. To feel confident the sale of your home is going to go through we want to clear this hurdle. This also makes you a stronger buyer when you are submitting an offer contingent on the sale of your current home. Knowing your current home is through the “Due Diligence” puts the sellers and agent of your new home more at ease. This gives you a greater chance of getting an accepted offer.
Step 6. Buying your new home.
Now that you have you home under contract it time to buy your next home. We have 2 weeks to do this. You might think this is not enough time but you are already prepared. You’ve already been approved by a lender. You’ve been previewing homes on the market. In some cases it can be too much time and we have to try and move up the close of escrow date on your sale. We’ve negotiated this before with other clients. It is very common.
You are going to want to make your new home purchase contingent on the successful close of your current home. This protects you if for some reason your home does not close. Your earnest money is protected and you are not obligated to purchase any home if your deal falls through. You don’t want this to happen and don’t expect it to happen but you have to take the precautions to protect yourself.
We’ve just skimmed the surface here
This is a good guide to give you a idea of the steps it takes selling your home while simultaneously buying your new home. There is much more information you will need. Having an experienced Realtor to guide you though this process is the first step. MJD Group with Platinum Service Realty specializes in this type of transaction. Did we mention that we can save you thousands of dollars while doing this? If you have further questions or would like to set up a no obligation consultation please contact us.