How to Sell and Buy a House at the Same Time
If you’re thinking about buying a new house but need to sell your current one to do that, you’re probably feeling a little overwhelmed right now. Obviously, the market right now is pretty crazy - inventory is low and there are a lot of buyers out there competing for the limited number of homes available, which can make the thought of jumping back into the market as a buyer after selling your house pretty intimidating! But really, you aren’t alone! There are actually a few ways to sell and buy a house at the same time. Here are a few ways we can structure the process to buy a house while selling your own!
How to Buy a House While Selling Your Own
1. Creative Financing Options
I get it - in most cases, you’ll need the equity from your current home to put toward buying your new one. But there are actually quite a few cases where you might be able to qualify for a new home even with your existing mortgage payment. If you do, this opens up the possibility of buying a new home while you still have your current house. If this works for you, it’s as simple as closing on your new house and listing your old home as soon as that happens!
And if the thought of having two mortgage payments scares you even if you qualify for it (I understand, it would me too!), here’s the thing: in most cases you’ll have a little bit of a gap between buying your new home and making your first mortgage payment on it. So, for example, if you closed on your new home today (February 16), your first mortgage payment wouldn’t be due until April 1.
This gives you about a month and a half to move into your new home, list your current one, and close on your old home before you have to start making payments on the new house!
Option 2: another option for structuring your financing could be borrowing money in your 401(k), and then using the proceeds from your existing house’s sale to pay the money back. You can usually do this without incurring any tax penalties, but make sure to check with your lender or tax professional to be sure!
2. Post-Possession Structure
Buyers and sellers can negotiate terms into their contract to allow for sellers to remain in their homes for a certain period of time after closing. In this case, the sellers will generally pay rent (sometimes in the form of a per-day fee) to stay in the house. And because we’re in such a crazy seller’s market right now, it’s definitely not uncommon for buyers to be open to a situation like this so they can ultimately get your home.
3. Short-Term Living Options
Another option for buying and selling a house at the same time is to find a short-term living option to cover any gaps between selling your home and closing on your new one. You could stay with friends or family, or get an Airbnb for a short amount of time until you can move into your new house. It may not be the most ideal, but if you just need somewhere to stay in that limbo period between selling your old house and buying your new one, this can be a great option to help you out!
I hope this helps relieve some of the stress around how to buy a house while selling your own! I promise, it’s not as complicated as it seems - and with a great REALTOR® behind you, we can definitely find a solution that works for you!
If you have any questions about the whole process around selling and buying a house at the same time, or buying and selling in general, I’m an open book! Send me a message here!