If you thought buying a house was difficult, imagine how much harder it must be to sell and buy a house simultaneously! This scenario might seem like an anomaly, but the truth may surprise you; a whopping 61% of Americans selling homes are also attempting to buy a new one.
From moving to a different area to upgrading your space, there are plenty of reasons why you could be considering selling your house, and buying a new one at the same time in 2024.
The good news is that at Sishodia PLLC, our team of New York City real estate attorneys are here to help you along the way and help prevent some of the most common mistakes during the process. Our team can assist you in understanding closing costs and taxes associated with buying and selling a house. Learn exactly what you need to know to sell and buy a house like a pro below.
Tips on How to Sell and Buy a House at the Same Time
Regardless of the path you take, selling and buying a house at the same time in 2024, especially with the ongoing pandemic you have to take into account, will be a challenge.
On the other hand, some things may be easier (like virtual house tours versus in-person), but on the other, it may complicate a few other things (such as signing documents electronically.). Learn our top tips for selling and buying a house simultaneously below.
Break Down Your Goals in the Beginning
The number one tip that will help you sell and buy a house at the same time is to break down all your goals in the beginning by writing them down. This will help you stay organized and focused throughout the process.
Prepare Your Current Home First
Preparing your current home for sale is a tedious process. You’ll need to clean up clutter, get your things out, and depersonalize everything. In addition, you may need to make some minor repairs or touch ups to increase your home’s value.
This process can take anywhere from a few weeks to a few months. If you work full time or have children, expect that timeline to increase.
With that said, it may be in your best interest to prepare your current home first before beginning the process of selling or buying a home. That way, you’ll have time to focus on the other complicated matters that come along later on.
Consider Contingency Clauses
If you’re making an offer on the home you want to buy but haven’t sold your current house yet, you might want to learn more about contingency clauses. This type of clause will make your offer on the new home contingent upon selling your old home first.
This option is attractive because it lets you back out of a new home purchase if you can’t seem to sell your old home. Additionally, this option won’t come with the typical legal consequences like losing your deposit or incurring a fee. However, please keep in mind that in the Seller’s market, this contingency may not work as more contingencies you have submitting your offer, it becomes less attractive for the Seller.
Avoid (or Cope With) These Common Pitfalls While You Sell and Buy a House
These tips will help you get through buying and selling a house at the same time, but they won’t make the ordeal any less challenging! As you go through the process, there are several pitfalls that you’ll want to avoid. Keep reading to learn more about how to avoid or cope with some of the most common snags.
You Need to Move Out Before Your Next Home is Ready
What happens when you’ve sold your old home but your new home isn’t quite ready yet? In this case, you’ll have no choice but to keep all of your things in storage and stay in temporary housing. Avoid this pitfall by buying your new home before you sell your old one. This may not be realistic if you need your Sale proceeds to purchase your new home. The best way is to be absolutely transparent on your needs and plans with your real estate broker and real estate attorney so they can work out your deal to include a post-closing possession as part of your deal.
Getting Trapped in a Temporary Rental
What happens if you move out of your old house but then get trapped in a temporary rental? Always read your rental agreements thoroughly and carefully to ensure this doesn’t happen to you!
|Tips and Considerations
|Break Down Your Goals in the Beginning
|Start by clearly defining your goals and writing them down to stay organized and focused throughout the process.
|Prepare Your Current Home First
|Preparing your current home for sale involves decluttering, depersonalizing, and making necessary repairs, which can take several weeks or months.
|Consider Contingency Clauses
|Explore contingency clauses when making an offer on a new home, allowing you to back out if you can’t sell your old home without major consequences.
|Avoid (or Cope With) These Common Pitfalls While You Move
|Be prepared for challenges like needing temporary housing if your new home isn’t ready after selling the old one. Communicate your needs with your real estate team.
Buying a New Home and Not Selling Your Old One
What happens when your new home is ready for you to move in to but you just can’t get rid of your old one? If that’s the case, then you could end up sitting on a home that’s only devaluing as it goes uncared for. You can avoid this by using the contingency strategy outlined above.
How Soon Can You Sell A House After Buying It?
As a homeowner, you have the freedom to sell your property whenever you want, even immediately after purchasing it. However, there are several factors that you should consider before doing so. Selling your house too soon after buying it can result in financial losses, capital gains taxes, and mortgage prepayment penalties. In today’s unpredictable market, homeowners opt to remain in their residences longer to accumulate equity.
If you decide to sell your house, you could potentially be liable for capital gains taxes, which will be determined by your annual income and the duration of your property ownership. Additionally, you will be responsible for paying closing costs, which can be at least 10% of the sale price. Closing costs include fees, escrow charges, transfer taxes, and property taxes.
There is another crucial aspect to take into account, which is the interest rate on your mortgage. Upon taking out a home loan, you will be required to pay interest on the loan amount. Typically, loans are structured in such a way that you will pay a higher amount of interest during the initial years of the loan. In case you decide to sell your house within a year of obtaining the loan, you may have minimal equity, which could result in owing the bank more money than the value of the house upon selling.
Relocating expenses can also be significant. The cost of moving truck rentals, movers, packing and storage, and cleaning can add up to thousands of dollars depending on where you are moving.
If you are considering selling your house shortly after buying it, it is advisable to seek the assistance of a knowledgeable New York real estate attorney. At Sishodia PLLC, our team of experienced New York real estate lawyers can assist you in navigating the intricacies of real estate transactions and avoiding costly errors.
Can You Sell Your House If You Have A Mortgage?
Selling a house with an existing mortgage is a practical choice and is quite common especially considering that the average homeowner typically resides in their home for around 13 years. Consequently, it’s perfectly normal to settle your mortgage by selling your home.
Understanding how to go about selling a house with a mortgage is crucial. The most critical factor is that you should be able to sell your home for an amount that exceeds the remaining balance on your mortgage. Selling your home for more than its initial purchase price is crucial because it allows you to pay off your mortgage and have some surplus funds. Alternatively, if you’re in the market for a new home, you can use these profits as a down payment on your next property.
If the sale of your home doesn’t generate enough money to cover your mortgage debt, you will be responsible for covering the shortfall from your own resources. To ensure a profitable sale, it’s advisable to assess your home’s current market value and compare it to your existing mortgage balance, confirming that you have sufficient equity to sell your property for a gain.
Selling your house with an existing mortgage can be a complex process, especially in the intricate New York City real estate market. However, a skilled New York City real estate attorney can navigate these complexities and guide you through the legal intricacies of selling a mortgaged property for a seamless transaction that protects your interests. Contact Sishodia PLLC today to get the professional guidance you need to successfully sell your mortgaged home and achieve your real estate goals.
Get Help Buying and Selling a House at the Same Time in 2024
When you need to sell and buy a house at the same time, it’s all too easy to get overwhelmed. You have a lot on your plate, and it won’t be easy to attempt to tackle everything on your own. The good news is that it is possible to sell and buy a house at the same time, and there’s never been a better time to do so than in 2024.
The housing market is in a good place right now, and hopefully, you are, too!
If you need any help with the complicated process of selling and buying a house at the same time in New York, our experienced real estate attorneys may be able to help. Leave your contact details on our online form now to get in touch so you can make the process of buying and selling a home simultaneously go as smoothly as possible.