Buying and selling a home at the same time is a tough row to hoe in any market. It is a difficult juggling act that requires the coordination of all kinds of logistics, which is made even more difficult by trying to close simultaneously or close together on two homes. But it can and is successfully done, for, according to the 2017 Zillow Group Consumer Housing Trends Report, 71% of home sellers are also looking to buy a home at the same time. But it remains a sticky catch-22 situation for them – that is, trying to know whether to buy first or sell first. So let’s examine the two most common scenarios and some tips for buying and selling a home at the same time in Metro Detroit .
Buying Before You Sell
Buying a home before selling your current one is probably the tougher of the two situations because it takes more financial juggling. Here, though, are a few ways to handle buying and selling a home at the same time in Metro Detroit in this case:
INCLUDE A HOME SALE CONTINGENCY
Top realtors advise using a “home sale contingency in any offer that you make” because it “allows you a set period of time to find a buyer for your old house before you move forward with settling on your new home. If you can’t find a buyer in time, you have the option to try to extend the contract or to back out of the deal.” The rub here, though, is that these contingencies aren’t used very much anymore. Sellers aren’t very fond of them because of the risk they take in never knowing for sure whether the deal will go through.
SECURE A BRIDGE LOAN
Another way to handle buying and selling a home at the same time in Metro Detroit is by using a bridge loan. This is a short-term loan that allows you to pay your current mortgage in order to ease the inherent financial strain. When you sell your old home, you use the proceeds from the sale to pay off the bridge loan. This way, you avoid having to pay on two mortgages simultaneously. But do keep in mind that a certain amount of risk accompanies bridge loans. They typically come with strict terms and high-interest rates, which means the selling and buying transactions have to move forward without any complications or delays.
HOLD TWO PROPERTIES FOR A TIME
Although this may be the most financially difficult, it is usually the safest strategy for buying and selling a home at the same time in Metro Detroit . It allows you to take your time marketing your old home and allows you to submit offers for new ones without the hassle of contingencies or the worry of paying off a bridge loan.
Selling Before You Buy
The other typical situation is the one in which you sell your old home before you buy the next one, which, of course, is typically more financially secure. But it does have its negatives, such as having to move twice within a relatively short time period. Here are a few ways to handle it:
LEVERAGE THE SETTLEMENT DATE
For smoothly buying and selling a home at the same time in Metro Detroit in this instance, you can use the settlement date to your advantage by closing on both homes on the same day. Then, you just move out of one home and into the other with no delays or extra expenses. Just keep in mind that this will be a point of negotiation, and you may have to make concessions in another area to get the date you need.
REQUEST A RENT BACK CONTINGENCY
A rent-back contingency is a contract provision that allows you rent your old home from the buyer till you can purchase and move into your new home. You are, however, asking the buyer for a favor, so it may not always work out because she isn’t obligated to grant the rent back. But it’s an option that can work, so it never hurts to try.
USE A SHORT-TERM RENTAL
If none of the other options works out, you can always rent a place to live for a short time until you close on your new home. The problem, though, is that short-term rentals will cost you significantly more than longer-term rentals. And, of course, you will likely have to rent a storage unit to put your overflow belongings in till you move.
Buying and selling a home at the same time in Metro Detroit can be not only complicated and financially stressful, but can be overwhelming as well. A local, experienced real estate agent can help you find the best option for your situation and help you successfully navigate all the complexities.