If you’re like the majority of Americans, buying your next property coincides with selling the old one. Even if your most recent property transaction didn’t involve what’s called a “concurrent closing,” your next one might. Unless you have a significant amount of capital saved, downsizing, upsizing, or moving across the country all require simultaneous buying and selling.
Understandably, a concurrent closing sounds stressful. There are a lot of different moving parts to just buying or selling on their own; how do you close both transactions together? Not to mention, sellers don’t like it when buyers make a contingent purchase, meaning that their current home has to sell before they close on their next house.
All of this makes a concurrent closing sound next-to-impossible, but trust me – it’s easier than it sounds. With a little bit of negotiation skills, some real estate savvy, and the information we cover in this article, The skilled Caroline Mathes team can help you buy and sell your properties at the same time. Here’s how to do it!
Know Your Home Value
How much is your property currently worth? What is its value per square foot? How many acres is it on? These questions will inevitably come up once it’s put on the market, but long before it’s time to list your house, knowing your property value helps you know your budget for your next purchase.
When it comes to a concurrent closing, there are a few of things to consider when it comes to your current property value:
- We suggest you have a home inspection completed before putting your home on the market. The home inspection will point out items that should be repaired before going on the market.
- Property value estimates are based on whatever data is available for the home. If you recently upgraded the kitchen, or if you recently experienced home damage, these factors can affect your property value in ways not represented by a simple estimate.
- An appraisal could be done to establish home value. The first week your home is on the market brings the most interested buyer. If a home is overpriced those buyers may look but probably won’t make an offer.
- If you’re planning on upsizing, discuss with your lender how much you can afford, including how much you want to use from the proceeds of the sale of your home.
Use the Same Realtor
Home buying and home selling each have different moving parts.
Using a different Realtor for your concurrent closing can create tons of extra communication work. Sometimes this work is unavoidable, like if you’re trying to buy and sell between two different parts of the country. However, if you’re buying and selling real estate in the same general area, it’s best to have a Realtor with expertise in both home buying and home selling. Otherwise, something is bound to get lost in communication, and the timing of your concurrent closing can be irreparably messed up. This brings us to our next point:
Time your sale right
In a concurrent closing, you generally can close on the same date or there could be up to 3 days between the time you sell your old property and buy your new one. The best way to ensure this timeline is to use the same title and escrow company for each transaction. You may need a short term rent back of a couple of days before closing on your new home. The buyer of your property will have to agree with rent back or you could be spending a couple of nights in a hotel.
Don’t Buy Too Big or Sell Too Small
Basically, you want some wiggle room in your closing. Whether we’re in a buyers market or a sellers market, you’ll likely have to be open to the possibility of selling your house a bit less, or buying for a bit more. Know your limits and plan according to the market, but don’t close on a transaction that simply doesn’t work for your mortgage or budget – keeping track of the numbers is key to making this work.
Be Willing to Compromise
While you want to negotiate for the best possible offers, you also have to be realistic. The market is either on the side of the buyer or the seller, but never both at the same time. Prepare to make concessions at some point in the closing, factor this assumption into some wiggle room so that you don’t sell yourself short or buy too high.
Have a Backup Plan
My clients often tell me that contingent closings feel like walking a tightrope. Sometimes that tightrope is two feet high, and sometimes it’s on top of the Empire State Building. Either way, buying and selling at the same time is risky, and your first attempt might not be successful. This is where a backup plan is crucial: maybe you can’t buy at the same time you sell, but you can sell, rent for a few months, and buy later. Have a few months of emergency rent saved for situations like this, because while a contingent closing is ideal for anyone looking to switch properties, the market doesn’t always allow it.
However, it’s always worth trying, and your best bet is to use a local realtor with her thumb on the market. If you’re looking to make a contingent closing in Reno, or you’re looking to make any real estate move in the Northern Nevada area, reach out to me today, and my team will make your biggest real estate dreams come true.