Let's open the door to homeownership together.

How do I sell my home and buy a new one at the same time?

This post goes out to a friend. I actually get asked this question quite often, as many of my clients are upgrading and not just buying for the first time. If you already own a home and want to buy another you have a few options.

The easiest option, if you are super rich and have loads of cash, is to just buy the new one and either rent the old one or burn it down. Most of us don’t have that kind of cash and would probably not burn down their home anyway, so let’s skip that one. The majority of folks have 3 real options.

Option 1: Put your house on the market and start looking for a new home immediately. This is honestly the best approach. I say that because nothing in real estate turns on a dime. Finding a home and marketing a home both take time. It takes a minimum of 30 days to get a loan approved, so if you get a contract on your home or put a contract on a new home, odds are you’ll be waiting at least 30 days to get your paperwork in order. The downside is that you are doing a lot at the same time, and it can be somewhat consuming. You also, in most cases, will have to sell your home in order to buy a new one. That means your purchase contract will contain a home sale contingency, which most sellers dislike and some will not accept.

A home sale contingency is a simple form that makes the purchase contract dependent on the sale of the home. What that means to you is if the purchase of your home falls through then you can back out of your purchase without penalty. You may still lose some money because you paid for a home inspection or appraisal, but at least you will get your deposit back.

Option 2: Get a contract on your home and then start looking for a new home. I’ve had two clients do this, and I can honestly say it is a horrible way to go. The pressure to move once you have a contract on your house is ridiculous. I’m not talking about pressure from the buyer. I’m talking about the pressure you put on yourself by feeling like you don’t have a place to live! The upside is that your home sale contingency will be easy since you already have a contract on your home. However, both families who did it that way swore they would never do it again.

Option 3: Buy a new home and then put your house on the market. This is a worse option than the second for several reasons. First, if you have to sell your home in order to buy the new one then the seller is not going to wait for you to get a contract. As I mentioned before, most folks are very circumspect about accepting a contract with a home sale contingency.

The most difficult part about negotiating this sort of thing is making the dates line up. This is where your agent’s experience and ability to communicate well are critical. However, with the proper attention to detail and good communication all around then things will move smoothly and you will be able to close on both homes the same day.

Posted on February 2, 2011 at 10:05 am by Ray Nelson

Leave a Comment

  • Facebook Feed

    Ray Nelson Realtor - Come visit me at this lovely home in sought after Woodlawn! Great location with great schools are just the icing on this well cared for cake. Aggressively priced at $374,900. I'll bake some gluten free cookies and have some water and other drinks. Come see me!

    4 days ago

    Ray Nelson Realtor - Sadness.

    6 days ago

    Ray Nelson Realtor - Part 2 of Wonderful Home Wednesday is a tour of 97 Claremont Dr in Stafford. This home is gorgeous and has "I like to entertain" written all over it! This one is listed by Sarah and is well priced and ready to go. Call or email me if you want to see this one or the prior home.

    1 week ago

    Ray Nelson Realtor - It's Wonderful Home Wednesday! I was lucky enough to tour 2 brokers open houses today, and I think they're both great! The first one is listed by Bonnie and has plenty of room both inside and out. Pictures don't do it justice, so let me know if you want to see it! It's at 3026 Mine Rd if you want t ...Read More

    1 week ago
  • Reviews

    5mystangs

    You couldn't ask for a better Realtor than Ray. He took the time to meet with us and get our requirements, once he had those he pulled the listings and off we went looking at houses. When we had found the perfect place for us he helped us navigate all the... (more)

    5sean mason

    Ray's expertise made finding a home a comfortable experience. He has the knowledge every home buyer is looking to gain. He knows the schools, the history, and can lead buyers to the right property. He did a great job negotiating price and worked hard to... (more)

    5krazed6

    Ray Nelson worked tirelessly for 9 months to get me into my home. The short sale process was very long and tedious, as there were several other issues that that needed to be taken care of as well, but he stayed with it and kept me informed of what was going... (more)

    Review Ray Nelson on Zillow.com