There are a lot of factors that go into buying a home. But what about selling one at the same time? While it may sound like a magic trick, buying and selling a home on the same timeline is totally doable. While it may require some juggling, the process can be a lot more seamless than you’d think. Here is what to know about how to buy a new home while selling the home you’re in.
Know your timing
There are all sorts of reasons why you might be looking for a new place. Maybe your family is growing or you are ready to move to a neighborhood where your kids can walk to school. Maybe you’re commuting more regularly and want to be closer to work. Or maybe you’ve fallen in love with a house a few streets over and see it as the future site of backyard barbeques. Whatever the reason, knowing your timeline can help you make a plan. A move you want to complete in the next year or so will likely look different than a move that needs to be done ASAP.
Make your plan
Buy first or sell first? There’s no “right” answer, it all depends on your situation. Selling first may mean that you have to move quickly, even if you haven’t yet found an ideal place. This can work, especially if you have a Plan B that will allow you to rent and take your time looking for a perfect home.
For many people, buying first can be challenging since they likely need the money from the sale of their house to afford the new place. It is possible to buy a house with a contingency that your house will sell. But a contingency clause can make you potentially less of a competitive candidate. This is a consideration if you live in an especially competitive market.
Ultimately, the plan depends on several factors, including your income and financial picture. Assessing housing markets can help you understand any challenges you face. Knowing your home is likely to sell soon after listing may mean you have to get as ‘buy ready’ as possible now, even including potentially buying before your house is sold.
Get buy and sell ready
It’s a good idea to begin prepping your home to be ready to show. Make any necessary repairs, clean out any clutter, and consider any paint jobs to make your home look more neutral and move-in ready.
It’s also a good idea to assess your finances. Understand your credit score and your debt-to-income ratio (DTI). This is the amount of debt you hold (including your mortgage) compared to your income. Most lenders are looking for a DTI under 43%, with lower being better. The lower your DTI is, the more confident a lender can be knowing that you will be able to cover your mortgage. If your credit score isn’t where you’d like it to be, consider ways to build your credit. This might mean paying down any outstanding debt on your credit cards.
When you feel your finances are in a good place, get a mortgage preapproval, so you’re ready to move quickly if you see a house you like.
Find an agent
While buying and selling a home at the same time may feel like a juggling act, agents have been able to do so and know the exact steps, questions, and considerations you’ll need to follow. Find an agent you trust using Rocket Homes. You’ll be able to ask prospective agents about their experiences and if you’re moving within the same city or area, you may be able to use the same agent for both. But if you’re moving out of town, you likely need two agents, since it’s important the agent knows the area well. An agent should be familiar with your area, understand your needs, and work with your priorities and timelines.
Figure out your financials
It can be challenging to make sure both sales line up perfectly. If you find the perfect house while your house is still on the market, what are your options? You might consider lending options to fund the down payment on the new house while you’re waiting for the old one to sell. You might stress-test your finances to see how it would be to float two mortgages for a few months, if necessary. You might consider whether renting your old place might be the right choice for you. Or, if your own house sold quickly and you’re still looking for a new place, you might consider the pros and cons of renting a house for a year to buy time to look for the perfect new home.
Find the right mortgage lender
The stars have aligned, you’re getting offers on your listed home, and you’ve found the perfect new home, too. Now is the time to get your mortgage lender and get the ball rolling. Rocket Mortgage can help you with all of your home buying and selling needs while saving you money. When you work with Rocket Homesto buy a home and use Rocket Mortgage to finance, you can get up to $10,000 cash toward closing from Rocket Mortgage. SELL+ allows you to receive up to $7,000 from Rocket Homes after closing when you work with a Rocket Homes Partner Agent. The two can also be used in combination so you can save on both the buy and sell side of the transaction. By partnering with both, you can simplify the home-buying process and could save thousands.
Buy. Sell. Finance. Save. Then take a deep breath, unpack those boxes, and kick back into your new home.
This article was created by SheKnows for Rocket Mortgage.
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