How To: Buy a New Home + Sell Your Home Simultaneously
Buying a new home while selling your current one can be a complex process, but with proper planning and coordination, it can go smoothly. Here’s a step-by-step guide tailored for Kansas real estate transactions:
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Step 1: Assess Your Financial Situation
A.) Meet with a Local Lender: Tanner Garver with Fairway Independent Mortgage can help!
- Get pre-approved for a mortgage to determine how much you can afford for your new home.
- Ask the lender whether you’ll be considered **“non-contingent”** or **“contingent”** based on your financial situation:
- Non-Contingent: You can purchase a new home without selling your current one first.
- In this case, you may be able to **recast** your new mortgage after your current home sells. Recasting allows you to apply the proceeds from the sale of your home toward the principal of the new mortgage, reducing your monthly payments without refinancing.
- Contingent: Your ability to purchase depends on selling your current home first.
- Discuss bridge loans or other financing options if you are contingent and need additional flexibility.
B). Evaluate Home Equity:
- Calculate how much equity you have in your current home. This will help estimate your proceeds from the sale, which can be used toward your new home.
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Step 2: Hire a Real Estate Agent
Choose an experienced local real estate agent who can handle both transactions: I might just know the perfect girl for the job! :) hint hint…ME
- Selling Your Home: The agent will help you determine your home’s market value, stage it, and market it effectively.
- Buying a New Home: They’ll help you navigate the housing market, negotiate offers, and align timelines.
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Step 3: Prepare Your Current Home for Sale
A. Declutter and Stage Your Home:
- Make your home appealing to potential buyers.
- Repair minor issues like leaky faucets or chipped paint.
B. Set the Right Price:
- Your agent will provide a Comparative Market Analysis (CMA) to determine a competitive asking price.
C. List Your Home:
- Once your home is ready, it will be listed on the MLS and other platforms to attract buyers.
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Step 4: Search for Your New Home
A. Focus on Timing:
- Look for a home while your current one is on the market.
B. Negotiate Contingencies:
- Consider including a contingency in your offer on the new home stating that the purchase depends on selling your current home.
C. Non-Contingent Option:
- If pre-approved as non-contingent, you can proceed with purchasing a new home before selling your current one.
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Step 5: Manage the Buying and Selling Timelines
A. Coordinate Closing Dates:
- Work with your agent to align the closing date for selling your home with the closing date for buying your new one.
B. Consider Temporary Housing:
- If the timelines don’t align, you may need to arrange temporary housing or storage for your belongings.
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Step 6: Review Offers on Your Current Home
A. Evaluate Buyers’ Offers:
- Choose an offer with favorable terms, such as flexibility on the closing date.
B. Negotiate:
- Work with your agent to counteroffer or accept a strong offer quickly to keep your new home purchase on track.
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Step 7: Finalize Both Transactions
A. Complete Inspections:
- Arrange for home inspections on the property you’re buying and address any repairs needed.
- Be prepared for buyers of your home to request repairs after their inspection.
B. Secure Financing:
- Finalize your loan for the new home. If using a recast, verify the process with your lender.
C. Prepare for Closing:
- Work with your agent and a state-licensed title company to ensure both closings go smoothly.
- Coordinate the transfer of funds from the sale of your home to the purchase of the new one.
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Step 8: Move to Your New Home
A. Hire Movers Early:
- Schedule movers ahead of time, especially if moving on the same day as closing.
B. Update Address:
- Change your address with USPS, banks, utilities, and other necessary organizations.
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Additional Tips
- Title Work:
- Kansas requires title insurance for both the buyer and the seller. Ensure the title company is involved early.
- Taxes:
- Be aware of property tax prorations at closing, as they will be based on the previous year’s taxes.
- Exclusive Buyer Agency & Exclusive Right To Sell Listing Agreements:
- In Kansas & Missouri, you will be required to sign these agreements before an agent can work with you as their client to represent you in home buying and home selling. (show you properties, write offers on your behalf, negotiate on your behalf, prep and market/list your home for sale on the public market & MLS system, etc).
By staying organized, asking the right questions during pre-approval, and working with a knowledgeable real estate professional, you can successfully navigate the complexities of buying and selling a home at the same time!