Searching and buying a dream home in itself is a highly challenging task and when this coupled with selling your home too, it becomes even more difficult. This article will be your guide when it comes to buying and selling a home at the same time.
1. Sell before Buy
If you are planning to buy and sell property at the same time, then selling first and buying later is the best and the safest option advised by many experts. When you sell first you have the following advantages namely
- You know exactly how much money you have.
- You can estimate the budget for new home much better
- You can plan your finances easily
2. Close previous loan
If you buy a property without selling the existing property then you will run the risk of paying 2 EMIs each month which will burn your savings. Also it is difficult to get a second home loan when your first loan is still running. For this purpose, it is suggested that you sell the property and close the loan and apply for a fresh loan while buying again.
3. Need a Transit space
If you sell first without buying, then you need a place to stay or store things. It is not easy to rent homes for a short period in India and you might end up paying a lot. Though sell first, buy next is the safest option, do consider the risk of finding a temporary place to stay.
4. Gives you more time sell for best price
If you buy the property without selling then it gives you enough time to find the best buyer for your property. When there is no hurry you can sell at a higher price. This gives you peace of mind too.
There are 2 kinds of markets, either Buyer’s or Seller’s market. When there is a lot of demand in the market, it is called a seller’s market as he can raise the price and still sell the property. When the demand is on the lower side, it is called a buyer’s market because he can negotiate and buy at a cheaper price. So analyze the market first, if it’s a buyer market, then buy first and then sell later or vice versa.
6. Contingency Contract
When you have found the perfect home for buying but not the right buyer, then it becomes a headache. This is where contingency contract comes to your rescue. You can request the buyer that you will pay for the purchase and execute the deed at the time of selling your existing property. This can be done if you found the buyer who will be buying soon or your seller who wants to sell desperately.
7. Rent-Back Contact
Many people buy homes for the sake of investment and not for self occupation. If you find such a buyer, then you ask him to rent the place back to you till you buy another property. This is called rent-back agreement. If the buyer agrees, it’s a win-win situation for both of you as you don’t need to move out and he gets rent starting day one.
8. Bridge Loans
Consider that you have found the perfect house for buying and also the buyer for existing property but the selling date falls after the buying date. You need money to pay the seller for the new property. This is where bridge loans or short term loans comes into play. You can show the sale agreement to the lender and ask for short term loan which you will pay back once your sale is done.
Must Read: 5 Tips for Choosing the Best Mortgage Loan
9. Real Estate Agent
Hiring an experienced and expert real estate agent to take care of both selling and buying at the same time is the best option. The real challenge is to find the right realtor. He will take responsibility of everything including finding the property and also the buyer for your home and executing sales on time. Since you are hiring him for 2 transactions you can also negotiate a discount on the commission fees.
Even with all these pointers buying and selling a property is a extremely difficult task, so make sure you take help from your friends and family for planning things.