• Ellie

Buying and selling simultaneously


Buying and selling at the same time may feel like an impossible

juggling task, but you can do it.

Buying or selling a home is complicated. What happens when you are buying and selling at the same time? Many people worry whether both properties will successfully close simultaneously, and feel overwhelmed at the mountain of tasks that need to get done in a short period of time. While this scenario might cause some jitters, I know from my years of experience that it’s entirely possible! Of course, there’s not a magic formula for success, but there are some essential rules to consider. Today I’ll run through the various options you have when buying and selling simultaneously, and I assure you that a well-planned process can be executed very smoothly.

Your options:

  • Sell first, then buy

  • Buy first, then sell

  • Buy and sell simultaneously

Sell first, then buy

This is the most secure plan, for sure: Sell your home, move somewhere temporarily while you search for your new home, then move into the new home. You get the cash from your previous home, which gives you more freedom when applying for a mortgage or putting an offer together. But it's cumbersome! The downside is that you will be moving twice instead of once, which can disrupt your life more than you may want or need.

If you need to sell first, I highly recommend looking to get a “Use and Occupancy” agreement from the buyers. This short-term contract allows you to "stay" in your home after closing, giving you an extra few weeks or so until you're able to purchase your new home.

Buy first, then sell

Another option is to buy first, then sell, if you have plenty of savings to draw upon. This strategy minimizes disruption, especially if you have a partner, children, or pets (or maybe all three). Buying first allows you to move into the new place at your leisure, and then take time to prepare your home for sale. However, if your existing property doesn’t sell quickly, you may have to deal with the stress of paying two mortgages at once. It’s important to confirm that your finances are in excellent order if you wish to buy first, then sell.

Buy and sell simultaneously

We frequently help people buy and sell simultaneously. The proceeds from the sale of your first property will go toward the closing on your new home. In a perfect world, you would prepare your home for the market, then go to open houses and find the perfect place immediately.

But wait...You want to put an offer in, but you haven’t sold your first home yet. Tricky, right?

It may be tricky, but there are ways to move forward. One option, which enables you to own two homes for a short amount of time, is to find bridge financing. Bridge financing is a short-term loan from a lender that secures the gap between when you close on your new home and sell your old one. In essence, you are getting a short-term Home Equity Line of Credit (HELOC) on your present house and using it as a down payment on your new house. Compass has launched their own Bridge Loan program- read here for more information about this unique service. You will then repay the loan when you sell your first home. If you know that this is the route that you want to follow, apply for the HELOC before you put your current home on the market, and before you put in an offer on a new house. In today’s competitive market, you’ll want to use every opportunity to show that your financial situation is stable.

Time the closings smartly

We recommend scheduling the closing of your old home within 24 hours of the closing date of your new home. This will enable you to move into your new home without moving two or three times.

As always, the local market dictates which of these options may be viable for you. However, they also depend on your financial stability and your tolerance for risk. Saying that buying and selling simultaneously isn’t stressful would be misleading, but most often these transactions do go smoothly. Finding the right people to work with, such as lenders, movers, and attorneys, help make things efficient and effective. Liz and I work with a network of excellent professionals, and would be happy to recommend some to you.

Ready to get started on buying, selling, or maybe both? Contact us. We’re here to help.

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lizandellie@compass.com

617.444.9644

1100 Massachusetts Ave

5th Floor

Cambridge MA 02138

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