Looking at Homes for Sale? Balance Selling and Buying Simultaneously

By in Colorado Real Estate Market

Buying a new home while selling your current one can be daunting, especially in today’s fast-paced real estate market. According to the National Association of Realtors, 71% of repeat home buyers owned their previous residences, which means many homeowners find themselves in the challenging position of balancing two transactions simultaneously, particularly when dealing with homes for sale.

As a real estate broker specializing in Colorado real estate, I’ve helped dozens of clients navigate these transactions. Here is what I’ve learned about overcoming the obstacles that arise when buying and selling homes at the same time, especially when it comes to country homes for sale.

Funding Struggles When Buying and Selling Simultaneously

One of the biggest obstacles that simultaneous buyers and sellers must overcome is finding the ability to fund their down payment while their equity is still tied up in their previous home. First, you must decide if owning two properties is financially feasible. Do you have enough assets for a second down payment? Can you afford two mortgage payments? For how long?

If you answered “no” to any of those questions,  you should prioritize selling your old property before buying your new one. However, if you’ve found your dream home among the homes for sale and have to make an offer, consider these options:

Cash-Out Refinance

You gain equity in your home as your mortgage matures because you’re actively paying off part of your home’s value each month. A cash-out refinance leverages that accrued equity, allowing you to take out a larger mortgage on your for sale home and pocket the difference.

Bridge Loan

A bridge loan is a short-term loan that taps into your current home’s equity to help you fund the down payment for your new home. While bridge loans satisfy this buyer/seller duality scenario, they typically have higher interest rates due to the increased risk for lenders.

Make a Contingent Offer

Making a contingent offer is a less risky way to navigate buying a new home before selling your old one. In this scenario, a contingent offer includes a condition that says you’ll only buy if your current home sells. While this mitigates your financial risk, it may weaken your offer in the seller’s eyes.

Selling Before Browsing Homes For Sale

As you can see, buying first comes with several financial challenges. The smartest thing you can do as a homeowner is to try and sell your current home first to secure the funds for your new one. If you go this route, consider these factors:

The Gap Period

If you sell your home before you buy, you’ll need to figure out a place to stay and store your things while you house hunt and during the closing process. Options include arranging a post-closing occupancy agreement with the buyer of your current home or finding a short-term rental property.

Finding a Competent Realtor

According to a Home.com survey, 40% of Americans say buying a home is the most stressful event in modern life. That stress intensifies when you’re trying to sell your home at the same time. Regardless of which step comes first, your real estate agent plays a pivotal role in helping you navigate the process.

If you’re selling your home in Western Colorado, I’d love to be that broker for you. At Western Land & Lifestyle Properties, we strive to help our clients sell their property quickly and for the highest price. While you’re looking at homes for sale, you can trust that we’re marketing your property with a proven strategy. Feel free to contact me at rob@wesellthewest.com or 970-986-2955 to learn more about the selling process.

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