The first thing to know is that this is a very common situation that homeowners find themselves in, and there are lots of ways to handle it.
First, a few frequently asked questions:
How Does Closing Work?
Generally, we close on both your current home and the new home on the same day. Schedule your current home in the morning with a three to four-hour gap before your next closing. This will give the title companies enough time to wire the funds.
What Happens if I Don't Sell?
The good news is that I generally make your contingency deadline (the deadline to sell your home) the same day as the closing. So if any last-minute issues happen you are covered.
What are Pricing and Marketing Like?
You will want to price aggressively for your market and make sure you put your best foot forward. If you are under a tight timeline, it is not always wise to test the market and list too high. That can cause a lot of headaches as the transaction moves forward.
How can I Make Time to Move Out and Move In?
We can ask for a post-occupancy period from the buyer of your home. This will allow a few days to a few weeks to move out. There is generally a charge for this or a security deposit, so include that in your budget. You may also have to hire movers or cleaners to help make it all happen.
Do I have to Use the Same Realtor for Both Transactions?
I highly recommend it if you are staying in the same area. Having the same Realtor for both transactions ensures that your dates and deadlines align and that nothing is missed in communication that could jeopardize your contract or your earnest money. It should also save you money as most Realtors give discounts if you are using them for two transactions.
Do You Have to Use the Same Title Company?
No. Title companies are able to wire money so as long as you keep a few hours between closings, you should be fine.
My Biggest Word of Advice?
Be realistic with expectations for pricing and timeline.
There are three basic scenarios people run into when buying and selling their current home, and each are different, so I will summarize them below and give you some useful tips to successfully navigate the process.
1. Your home is not already on the market.
Let's say you find your dream home, but your own home is not on the market yet. This is the most difficult of the three scenarios. The reason is because I have to convince the sellers of your dream home that your house will sell without it being ready yet. If you find yourself in this situations, I usually add in a few dates into the additional provisions to protect both you and the seller (and give them some confidence.) These provisions lay out deadlines by which to have the house on the market and when you will have your own home under contract.
2. Your home is already on the market.
If your home is already on the market, it is a bit easier to show the other party the marketability of your home. Things work basically the same as the first scenario, but you don't need the additional dates. If you are under contract make sure your dates like up with the offer on your home. If your home is not under contract yet, give yourself plenty of time to get under contract.
3. You don't need to sell your home to qualify for the mortgage.
It may surprise you, buy you may not technically need to sell your home first to qualify for a mortgage. Talk to your lender. This does not mean we won't still sell at the same time, but maybe we don't need to make it contingent.
Communication is key for making any real estate transaction go smoothly, especially in a contingency. Always let the other party know what is going on and understand that they have at stake, too, they could be in the same boat as you!