by Emily Hechler 
Moving into a new home is a major life decision, whether you’re new place is 10 miles away or it’s a 10-hour journey to your new home. Plus, you need to sell your existing home somewhere in the process. If you’re pressed for time or just want to move quickly, it’s possible to buy and sell a house simultaneously.
It’s even possible to close on the house you’re selling and the one you’re buying on the same day, but it’s not something I’d recommend. If there are any delays or issues with either of the closings, you could be in for a headache. It can take a few hours or even until the next day for your funds on one transaction to process. Play it safe and schedule your closings on two separate days.
If you’re buying, you and your real estate agent can propose a closing date. Aim to schedule the closing for your new home after the closing of the home you’re selling. Just keep in mind that you may need temporary accommodations between the two closings. This extra planning can help ensure a smoother transition into your new home!
Since we don’t suggest closing on both houses on the same day, you have two options. You can close on your new house first or you can close on your existing house first. Ideally, you will want to close on your existing house first. This ensures that you can use the equity from your existing house toward the down payment of your new house.
Sell Your Current Home First
List your house for sale. If you are serious about selling your house before buying your new one, your existing home needs to be ready to go on the market. Get any repairs or updates done before you list the house. This can help you try to stick close to your asking price. Plus, you won’t have to make any repairs while you are under contract for selling the house.
Start shopping for a few house. I suggest doing this with the same real estate agent that you are using to sell your house. They’ll have insight into your situation and can help coordinate the timing of closing on two houses simultaneously.
Get under contract on your existing house. Play close attention to the proposed closing date on your current house. This is the date that you will have the money in hand from the sale of your current – soon to be former – home. While you won’t have the sale price of the home in your bank account, you’ll get what you have built in equity of the home in your bank account minus closing costs you had to pay.
Make an offer. Once you find your potential new home, make an offer with a settlement contingency. A settlement contingency means that you will buy the home contingent of your current home closing. When you review the offer with your real estate agent, make sure that the closing date for your new home is after the closing date of your existing home. If for some reason, the sale of your existing home falls through, you will have a way out of buying the home you made an offer on.
Close on your current home. Assuming that there weren’t any major issues with selling your home, you can close on your home. After closing, you will have access to the equity you’ve built on your old home which you can use toward the down payment of your new home!
Close on your new home. Since you closed on your old home, you can now go through with your offer on your new home. Get all your necessary documents ready beforehand to make closing as smooth as possible.
Buy Your New House First
List your house for sale. Even though you will be closing on your new house before selling your old one, you still need to get it on the market as fast as possible.
Find your potential new home. If you are buying a house before selling, chances are that you found a great one that will be hard to pass on. At this point, your house is still on the market, waiting for a new buyer to make an offer.
Make an offer with a sale contingency. By making an offer with a sale contingency, this provides with the flexibility to back out of the offer if you’re unable to sell your current home in time. Keep in mind that the house seller may choose to accept another offer since you may not be able to follow through with buying it. When you make this type of offer, request an extended closing. This will give you more time to sell your current home. Plus, you can coordinate with your real estate agent to close on your current house first instead of your new one so you can use the equity you built on it to cover the down payment and closing costs on your new home.
Or, you can make a non-contingent offer. If you have enough money saved not counting the equity of your current home, you can make a non-contingent offer for your new home. This way, you can buy the property while your first home is still on the market. This will ensure that you have a place to move into whenever you sell your first home.
When you are ready to buy a new or new-to-you home, come to Alltru. By getting your mortgage preapproved, you’ll have the power to speed up the home buying process. Even if you’re not in a hurry, preapproval makes the process smoother and more straight forward so you’ll be one step closer to owning your dream home.
