Coordinating a Home Sale and Purchase: Ten Things to Consider
There are many reasons why you might be selling a current home and buying a new one. Whether it is due to retirement, job relocation, expansion or reduction of your family size, or, financial, the considerations are the same. How can you make the two transactions work smoothly? Assuming that you have not yet found the new home, here are some things to consider:
1. Work with the same agent
If possible, see if the same agent who is helping you buy your new house can help you sell your existing house. The agent has extra incentive to succeed as they know the purchase depends on the sales.
2. Include a contingency clause
If you have found the house that you want to buy, be sure that the contract you sign includes a contingency clause that gives you time to sell your existing house. If you have found a buyer for your existing house, but haven’t found your new house, also include a contingency clause in that one.
3. Include penalties
What if you sell your house, buy a new one, and then the sale of your existing house falls through and you have already bought the new one? Be sure that in addition to contingency clauses, the sale of your house has penalties in it that will cover you in the case that you have to carry mortgages on both houses simultaneously.
4. Consider the furnishings
Consider what you will want to take from the existing house, and what you will no longer need. Especially if you have already found the new house, it will be clear whether you want to leave behind certain appliances, furniture, etc, based on the new house. Added these to the sale of the house can make the sale more attractive to potential buyers.
5. Look at the money flow
Be sure you understand what money you will need for buying the new house. If you need down payment money which will come from the sale of the existing house, you must make sure you create ample space between the sale and the purchase to give you access to the funds. If necessary, consider a bridge loan.
6. Keep your plans to yourself
For your best negotiating in both buying and selling, it is ideal not to reveal that you are doing both at once. If the potential buyer of your existing house knows you have just bought a new house, they will feel you are vulnerable and subject to more intense negotiations. Likewise, if the seller of the house you are buying knows that you have just sold your house, they will conclude you are more desperate to buy. Play your cards close to the chest, and try not to give away information to either party.
7. Consider what to move
There are so many variables in moving from one home to another. If you are moving in to the new home before the existing one has sold, consider leaving some furniture behind so that the home shows nicely. Work with your mover to get a better deal on partial moves. Ideally, you would sell the existing one before you have to move into the next one. What is the time frame that you need in order to get into the new one without killing yourself to get out of the old one? Do you need to rent back the house for a week or so? Do it, it’s worth it.
8. Consider your utilities
What utilities do you want turned on in the new house and when? When do you want to turn off the existing utilities? Ideally you can avoid paying for two houses at once. Most utility companies will be able to set up a date on which the new location is turned on and the old location is turned off. Just be sure to leave time for the actual moving day. It’s hard to move in a dark or cold house. Don’t forget to set up the forwarding address.
9. Consider a backup plan
Be sure you have figured out what to do if the sale doesn’t go through in time, or, you can’t move into the new one in time. Where will you live? Where will you store your furnishings? Even if you don’t need it, having a good plan will allow you to proceed with confidence.
10. Coordinate the closings
When buying and selling simultaneously, getting the closings to line up can really make your life easier. That's easier said than done, however. For some helpful hints, see our article on coordinating closing dates.