Buying And Selling Home At The Same Time Without Stress
This ARTICLE Is About Buying And Selling Home At The Same Time Without Stress
The Team at Gustan Cho Associates are experts in helping mortgage borrowers Buying And Selling Home At The Same Time Without Stress:
- Gustan Cho Associates are experienced, mortgage experts
- In this article, we are going to provide you some information about selling your home
- With the spring 2020 season just around the corner, the real estate market and local housing inventory are about to pick up steam
- Over the years we have received many phone calls from clients who are trying to sell their home and buy a house on the same day
- In this blog, we will discuss how to buy and sell a house on the same day, go over the home selling process, and give you a few steps for the process
Hurdles With Buying And Selling Home At The Same Time
I know from experience that selling a house can and will have roadblocks. We will start at the beginning. How to prepare to sell your house:
- If you have not heard of the term SWEAT EQUITY, we will explain that now
- Sweat equity references minor repairs done by you to increase the value of your property
- Depending on your handyman skills, this can mean many different things
- When I sold my first townhome, I took it upon myself to paint the entire home before listing on the market
- There were quite a few scratches from my dog and everyday life
- This coat of paint put a fresh feel throughout the entire interior of the property
- The overall project cost me about $300 and in my opinion increased the value a few thousand dollars
- The fresh coat of paint also allowed my property to be eligible for FHA financing. FHA and VA loans are more strict when it comes to the appraisal process
- You are not allowed to have any peeling or chipping paint throughout the property to pass an FHA or VA appraisal
- The condition of your floors is also one of the first things a potential buyer will look at. In my case, my wooden floors were beaten up
- I did not repair them, but I ended up giving the buyer a seller credit to replace the floors when the home was sold
If your carpet is in horrible condition, this is another cheap repair that can add value to your property. Sweat equity and small repairs like these will make you your listing agents’ best friend.
Importance Of Hiring An Experienced Realtor When Buying And Selling Home At The Same Time
Now that you’ve given your home a quick facelift and prepared for the listing, it is time to find a realtor.
- You may also try for sale by owner, but depending on your expertise, it might be best to hire a professional
- When selecting a listing agent, you want to make sure you are comfortable, and they understand your needs
- They will give you a detailed breakdown of fees when selling and explain your bottom-line profits (or losses) at the end of the process
Please check out our blog on BENEFITS OF HIRING A REALTOR for more information.
Starting The Mortgage Process After Signing The Real Estate Purchase Contract
Once you have agreed on an offer the fun begins.
- Most of the time, your buyer will be utilizing a mortgage loan to buy your property
- So, the process from the contract being accepted to closing is typically 30 to 45 days
- During this time, you will need to give the buyer access to your property to complete a home inspection
- The home inspector will go through the property and expose any repairs that are needed
- There will also be an appraisal completed to determine the value of your property
- Please see our APPRAISAL VS INSPECTION BLOG to understand the differences
- Once you have completed the home inspection, this opens up a second negotiation process
- For example, during my home inspection on the townhome, the wood floors were listed as needed repair
- That is when the $3000 seller credit was added
- The buyer had asked me to replace the floors before moving in, but we negotiated a $3,000 credit to offset the repairs
Once you receive the inspection report, other items may need to be addressed, opening up more negotiations. There is an inspection time frame clause in your contract (usually 5-7 days) to complete this process.
The Importance Of The Home Appraisal When Buying And Selling Home At The Same Time
One of the next steps is the appraisal process.
- The appraisal process can be stressful
- In my case, I had a sales contract for $225,000 and the home only appraised for $220,000
- Based on comparable sales, I must say I did agree with the appraised value of 220,000
- So, I agreed to lower the sales price from 225,000 down to 220,000 (and offer a $3000 credit to fix the floors)
- Depending on the condition of your property, you may need to repair items and or bring your property up to proper building codes
- A common item needed during an appraisal is the installation of a railing
- Depending on your local building codes, a railing may be necessary
- In order for a lender to accept the appraisal, it must state the property is in “as is” condition
- The appraisal report can come back “subject to” repairs, which means the home is valued at a certain amount, subject to repairs being completed
- Those repairs can be as minor as adding a smoke/ carbon monoxide detector to as major as needing a new roof
- We have seen all sorts of repairs needed before being able to close on the loan
Once the appraisal process is complete, as a seller, you are pretty much on autopilot until the closing date. You will want to be in touch with your listing agent and have them follow up with the buyer’s lender to make sure their loan is on track for the closing date.
The Key In Avoiding Stress When Buying And Selling Home At The Same Time
Selling and buying on the same day:
- Selling your home and buying a new home on the same day can be stressful
- This process is possible and very common
- There are some moving parts to this process
- You will want to make certain your buyers are qualified to purchase your house
- It is critical that they hit your closing date on time
- If for some reason if their financing falls through or if they ask for an extension, you are not able to close on your new home
- Remember, the mortgage company you’re using to purchase your next property will need to verify your current home was officially sold so they do not have to count that mortgage payment against your debt-to-income ratio
- Also, in most situations, you will need the proceeds from the sale of your property to close on your next property
This whole process is called a simultaneous closing, and we do it all the time. We are mortgage experts who take your time and money very seriously. It is important to select a lender who knows the importance of timelines and is able to execute on time.
Mortgage And Underwriting Process
The mortgage process for buying and selling on the same day is not much different than a regular mortgage process.
- You will need to let your lender know you are using the proceeds from the sale of your property as assets to buy your next property
- You will need to provide them with a sales contract for the sale of your property and a HUD-1 / preliminary closing disclosure so your lender can see the funds you will receive at closing
This way the underwriter can count those assets accordingly.
Qualifying For A Mortgage When Buying And Selling Home At The Same Time
There is a lot of information in this article. We are the experts, please call Mike Gracz at 630-659-7644 to discuss how you can sell your home and buy your next home on the same day. We have been doing this for a long time and we know how stressful the process can be. We even have the ability to underwrite your qualifications before you put your home on the market. Check out our TBD UNDERWRITING APPROVAL PROCESS. We are available seven days a week for any mortgage questions. We are a one-stop mortgage shop and look forward to helping you buy your next home.