Tips on Navigating Synchronous Selling and Making the Whole Process as Stress-free as Possible
If you’re ready to buy Pleasant Hill real estate but already own another home, you may find yourself in the situation of having to buy and sell simultaneously. While having to buy and sell at the same time
is a common scenario, it can become quite stressful if you don’t do some planning. Here are some ways you can prepare for all the possibilities involved in a synchronous selling situation.
Can You Afford to Buy and Sell Simultaneously?
Synchronous selling can get pricey if the timing doesn’t go your way and you’re stuck with two mortgages or have to find a temporary place to live. That’s why it’s important to dig deep into your financial situation before you start looking at Pleasant Hill houses for sale.
Here are some of the important questions you need to ask yourself before you move forward with the process:
- How long will I be able to make two mortgage payments before it starts to significantly impact my finances?
- Do I have enough cash available to put a down payment on a home if I am unable to access the equity in the home I own?
- Do I have enough cash available to pay for moving costs and make any necessary repairs on my new home if I can’t access the equity in my current house?
- If I am required to make two mortgage payments, how long can I reasonably do so before it starts to negatively impact my ability to save for retirement or an emergency fund?
If you don’t first consider your financial situation, you may find yourself in a scenario that hurts your financial future and sets you back on achieving your goals. Talk with your Pleasant Hill real estate agent as well as your financial advisor about the state of your finances and whether they can withstand the worst-case scenario. If they can’t, you may want to hold off on buying until you can sell your current home or delay the entire process until you are in a better place financially.
If You Buy a New Home Before Your Current House Sells
One of the biggest challenges in the synchronous selling process is when you purchase one of the Pleasant Hill houses for sale before you are successful in selling the home you currently own and occupy. For most buyers, coming up with cash for the down payment, closing costs, and other expenses involved in buying a house without being able to access the equity in their current home is difficult.
Fortunately, there are options available to help you bridge the gap. Here are some of the most common:
- Sell some assets. If you have tangible assets like classic cars, jewelry, or precious metals, or other assets in the form of stocks, bonds, or mutual funds, you can sell these to get cash for your down payment and other expenses. Though you will miss out on future earnings on these assets, you will not have to pay interest on a new loan.
- Secure a HELOC. A HELOC, or home equity line of credit, is a revolving line of credit secured by your current home. Those with good credit scores and low debt-to-income ratios can usually secure HELOCs for a lower interest rate than other common loans and can choose how much money they take out and pay interest on.
- Cash-out refinance. You can still take advantage of the low mortgage interest rates even if you’re trying to sell your home. A cash-out refinance pays off your primary mortgage and then takes out a new loan for more than you owe on the home. You get the difference in the form of cash that you can then use for a down payment or to pay for other expenses.
Of course, financing is not the only hurdle you’ll face if you buy new Pleasant Hill real estate before you sell your current home. You’ll also have to decide what to do with two homes. A common solution is to rent out your current home. You can either do this short-term to help cover the mortgage payments until you can sell, or you can opt to turn the home into a long-term rental for another source of income.
Tips if You Sell Your Home Before You Buy
The Pleasant Hill real estate market is currently experiencing a hot seller’s market, which means it’s more likely that you will sell your current house before you can find a new one to move into. This comes with its own set of challenges, the most pressing being that you will not have a place to live once the new owners take possession of your home. Here are some ways you can fill the gap until you buy:
- Ask the buyer for a leaseback. If the buyer you sold your home to is also trying to sell theirs, they may consider a leaseback agreement where you agree to rent your home from them after it closes. This is usually a short-term arrangement to give you time to find a new home and the buyer time to sell their other home. A leaseback agreement needs to be secured before your home closes.
- Rent a home short-term. Take the pressure off the home search by renting a home for a few months while you continue your search. You can rent a storage unit for most of your furniture and other possessions to free up space and make your eventual move into your new home easier.
Buying and selling Pleasant Hill real estate at the same time comes with many possible challenges, but they are much easier to manage when you have solutions lined up no matter what situation you find yourself in. Ready to begin the simultaneous selling process? Reach out to an experienced local Realtor® like those at Ridge Real Estate Group to help you buy and sell successfully.