Buying a home is often a difficult process in and of itself. But how about if you are trying to sell a home while trying to buy one at the same time? It can be done if you have a plan and know what you are doing.
We have previously discussed the importance of hiring a real estate professional to help you navigate through the property buying/selling experience. This is even that much more important if you are doing both at the same time. An experienced real estate agent will know when the market conditions will make it easier to buy and easier to sell. The experienced real estate agent will also help you with having the majority of your possessions ready to move, and preparing as much as possible in advance; having all repairs done so that the sale is not delayed; and not fixating on the little things that may bog down a real estate closing.
The point being, make sure you have a qualified team of professionals, and especially a real estate agent, on your side that will help you accomplish your objectives.
If you have sold your home but you have yet to buy or move into the new home then please be advised that you have many options available to you.
For instance, you may wish to reach out to friends and family to find temporary quarters. The advantage to doing this is the rent will likely be affordable and the buyer could stay for as long or short of a time as they need. Plus, you will have the added benefit of re-connecting with some family and friends.
Additionally, you probably do not want to put a contingent offer on the home that is being sold because it would make it less desirable to the buyers. Rather, sellers should put their homes for sale first and, once they have negotiated and accepted an offer, then begin looking for a new home to buy.
Financing may also play a critical role in helping you accomplish your objective. You may wish to apply for a bridge loan. This would give the seller the short-term financing needed to buy a new home before the old one is sold. However, bridge loans are offered by few lenders and only apply to people with excellent credit and plenty of equity in the home.
Renting your just sold home from the new owners is also a potential short solution to the sell-buy conundrum.
Buying a home for the first time is exciting. While home hunting it may be easy to get blinded by the size of the swimming pool, or the spacious open layout, or the amazing backsplash on the kitchen walls to go with those new granite and quartz counter tops and hard wood floors. When one falls in love for such a property they will often make mistakes that will regret at a later date.
With that said, here are five mistakes all first time home buyers should avoid making.
- Overspending. Know your budget. Know your financial limits. You should meet with a lender to determine what your financial limits will be and then secure a pre-approval for an amount that you can afford. You should only start searching for a home once you know how much you can afford. And you should try to stay within your financial parameters.
- Don’t Assume You Will Be Making More Money. One of the lessons we all learned from the Great Recession is that many people, and lenders, believed that individuals would be making significantly more money in years to come. Don’t make such assumptions. During the Great Recession many individuals actually lost their jobs and then their homes because such assumptions were made. So if you’re about to graduate from medical school, don’t assume that you will be making significantly more money in a few years even if your career path is a bright one.
- Failing to Account for your Closing Costs. We recently discussed, in detail, seven tips that could save you money on your closing costs. In sum, don’t underestimate the impact the closing costs may have on your transaction. You may have to pay such items as homeowners insurance, property taxes, and depending on the size of your down payment, private mortgage insurance (PMI). But that is not all. You will also have to pay various third party vendors to perform necessary tasks to complete your transactions. For instance, you will likely have to pay for a home inspection, survey, title insurance, attorney fees etc. Therefore, make sure you have an understanding of what your closing cost obligations will be prior to completing your real estate transaction. Feel free to contact us today to discuss closing costs associated with your transaction in greater detail.
- Failing to Protect Yourself. Understand the fine print in the contract. The sales contract is typically several pages for a reason. Home inspections, for instance, could reveal some significant problems with the home. But many first time home buyers don’t understand the significance associated with such clauses and may perform such inspections outside of the agreed upon time period set forth in the contract. The same holds true with finance contingency clauses. If a buyer fails to qualify for financing, but also failed to adhere to the strict terms of the financing contingency provision in the contract, then their deposit may be end up in jeopardy. Don’t put your deposit in jeopardy. Understand your contract and ensure that all timelines are complied with or ensure that you secure the appropriate extension on such deadlines.
- Failing to be Realistic. Some first time home buyers are simply too optimistic and will purchase a property that has substantial problems because they love the color of the front door. Many first time home buyers will purchase a home in the wrong part of town thinking they can fix the problems with the home, but forgetting that they can’t correct the problems in the neighborhood. Yet other first time home buyers may simply be too difficult. They may submit low ball offers and then get frustrated when ever such offer is rejected. Make sure you’re realistic with your expectations.