You’ve achieved the dream of homeownership — and now want to move on to another. Since you’ve already gone through the process, you know how just how complicated it can get. That’s when only one property is involved in the equation. But two properties? That’s another set of complications waiting to happen.
The Repeat Buyer’s Dilemma
Problems may come up when you decide to sell your home while you’re still paying for a mortgage. That is doable, and you can get more than what you owe on your home. The buyer could take on the remaining debt, and you could make out all right with the sale. You could even get enough to put a substantial down payment on, for example, a townhouse in a community of new build homes.
That happens only if buyers are willing to take on a home with a mortgage. Although a sale like this could be more affordable for some, other buyers may prefer a house without financial obligations.
So your property could spend more time on the market than necessary. If your home languishes on the market, you may lose an opportunity to buy a home you’re eyeing, and you risk losing more money in the process.
A solution to this dilemma would be to keep tabs on the market. Is it a good time, for starters, to sell and buy a home? Does the market have more sellers than buyers? An understanding of the market means you’ll know whether you’ll be in an excellent position to sell or buy.
Going it Alone
Another potential problem that could crop up from your transaction is the absence of professional help. Without an experienced and skilled real estate agent on your side, you could end up putting the wrong price on your home.
You could overprice or underprice, missing out on the real value of your property. The price you set may not be appropriate for the neighborhood your home’s in and for the current property market.
A property agent can help you come up with the right estimate for your home. The right agent will be able to help you determine whether the proceeds from your home sale will allow you to make a down payment and save some for a new mortgage.
And you may also want to use the same agent for both transactions because then they’ll have your best interests at heart.
Your agent may even suggest that you defer a purchase until you’ve got your finances in order and after the sale on your home is final. You can’t be too sure with some buyers because some back out of a purchase. And they do have a legal right to do so; the National Association of REALTORS shares 7 percent of contracts have been cancelled on June 2020 alone.
Any property transaction will always have some kinks in it. The more complex ones, like a simultaneous sale and purchase, are likely to create more than the usual issues. So if you must do both at the same time, make sure you’ve got a clear plan in place and have professional guidance.