Buying and Selling at the Same Time? Here are 3 Ways to Make it Happen.
Chances are good that you’ve never thought about how tricky it is to buy and sell at the same time unless you’ve already done it.
Truth be told, buying a new home while you still own your current home can create a long string of dominoes all depending on the one before it to make it move. And if just one of these dominoes doesn’t move, the whole thing falls apart.
So, how do we plan this process to ensure that all the pieces come together easily for you? That’s where we come in.
There are really 3 options to buy and sell a home simultaneously:
Option #1: Conditional On The Sale of Buyer’s Property (SOBP)
Most homes are sold with conditions of one type or another (like the very common financing condition or home inspection condition). When you have a home to sell before you can buy, you’re able to offer on your new home conditional on the sale of your current home - meaning you would only be obligated to buy once your current home is sold.
Option #2: Own Both Homes Temporarily
If you’re in a financial position to carry both homes, with or without mortgages, carrying both becomes a viable option.
This process is helpful when you want to own the new home without living there - for purposes of renovation, etc.
But there are several drawbacks to this process. First, you need to qualify if you’re planning to borrow funds, which is entirely up to the bank’s discretion. Second, you could have payments & expenses on two properties at the same time. Third, you can’t apply the funds from the sale of the first home towards the purchase of the second - which means you’d need to come up with upfront funds out of pocket.
Option #3: Rent A Home
Most home sellers are unaware that they can stay in their current home after it sells by renting it back from their buyers. Yep, it’s called a rent-back deal. In this case, you would get all of the proceeds from the sale without having to move - which gives you both the time and money to purchase a new home.
Of course, the big drawback is that it transfers the risk to the buyer and most buyers are hesitant to take the risk of renting their new home and prolonging their own move in date.
Again, buying a home when you have a home to sell can be tricky. I’ve seen transactions where multiple families are all buying and selling conditionally, which creates a really long string of dominoes!
Orchestrating a transaction like that can be complicated and requires a REALTOR® who can see the bigger picture to ensure that no dominoes get missed.
If you’re thinking about making a move (or know someone who is), we would love to help. Hit us up, anytime: natalie@nataliedavison.ca.
Just remember, you don’t have to go it alone.
