n the United States real estate market, the majority of sales take the form of existing home sales, the opposite of new home sales. As of July 2020, the seasonally-adjusted annual existing home sale rate in the United States was 5.86 million units compared to just 901,000 new residential home sales.
When homeowners list their homes on the real estate market, they must find new places to live. Many of these hopeful home sellers opt to purchase new residences rather than renting. Transitioning from one home to another is challenging enough.
Successfully securing and moving into a new residence is especially difficult when attempting to sell your current home. Considering the fact houses are the most expensive purchases most Americans ever make, you can find yourself between a rock and a hard place when buying and selling at the same time.
Learn from these 5 mistakes to avoid now to improve the chances of successfully pulling off your simultaneous home buying and selling operation.
1. Making Plans That Simultaneously Rely on Multiple Parties
Moving is a long, arduous process. Hiring a moving company can be expensive and could result in your belongings being broken, misplaced, or stolen. Unless you’re a moving professional, moving without professional assistance could result in injury, fatigue, and unwanted stress. You might not make the move on time if you move your own belongings. You also won’t be able to hold another party liable for damaging your things.
Why not move into your new home and out of the one you’re selling on the same day? Although this option will require heaps of elbow grease, it seems like a good way to get the moving process over with as quickly as possible.
These plans assume that:
- Your home’s buyer won’t back out.
- The buyer’s closing paperwork will go through.
- Your closing paperwork won’t run into any issues.
- Your soon-to-be home’s seller won’t back out.
- You won’t have any issues moving.
Relying on so many moving parts is never a good idea. A workaround for this issue is a rent-back agreement. If accepted by your home’s buyer, the rent-back agreement gives you the right to rent your home for a few months. The benefit of this arrangement is to segment the closing procedures you’re involved in to reduce risk.
2. Not Building Fully-Functioning Backup Plans
Not having a backup plan is asking for failure. You should thoroughly construct a well-oiled, reliable backup plan with tons of viable options to choose from. It should be built several weeks ahead of time. You also need to check in on the plan’s components to make sure they’re still available options on a weekly basis leading up to the sale of your home.
3. Closing at the Wrong Time of Day
Bank transfers and closing documents are the two primary ingredients of finalizing real estate transactions. Closing documents move around within or between financial institutions, law firms, and real estate agencies on weekdays during regular business hours. Bank-to-bank transfers use an automated clearing house (ACH) for handling payments. These payments typically only move on weekdays. When used to buy or sell houses, ACH payment transfers usually stop in the early afternoon two to three hours before banks close.
Most people have free time during afternoons or evenings and on Friday, Saturday, and Sunday. Although these times also might be convenient for moving, you should avoid placing yourself in a situation where closing document or bank transfer processing delays would ruin your plans.
If possible, file closing documents and send bank transfers necessary for finalizing your deals early enough to have at least two days to spare.
4. Relying on Two or More Different Real Estate Agents
The vast majority of consumer real estate agents don’t serve clients around the nation. They typically represent clients in a relatively small area. Agents who work in cities, for example, are often willing to assist clients as far away as those cities’ surrounding counties.
Arguably the most vital asset of successful real estate agents is their deep connections to the locals in the communities they serve. Strong reputations built through making countless positive impressions on locals over periods of years are necessary for success as real estate agents.
This leads homeowners who’re buying and selling at the same time to hire one agent to search for homes and another to sell their existing homes.
Expecting these agents to work coherently is shortsighted. You should always hire a single real estate agent to list your current home and find your new one.
5. Making Extravagant Purchases Before Finalizing
Most people aren’t wealthy. If you were filthy rich, you wouldn’t be reading this. Even though you feel like you should splurge to make your new home sufficiently comfortable, this is a bad idea. Hold back on big purchases until your deals are finalized.