14 Jul Q: Should I buy a new home and sell my current apartment simultaneously?
It can be done. My advice is to proceed with a plan that removes as much stress from your selling and buying decisions as possible.
In this situation, people sometimes try to complete a simultaneous transaction only to later feel like they lost out on one side of it. Sometimes an owner will list their home, get a terrific offer, and be forced to buy the first home they see because they had to move fast. Other times, an owner might accept an inferior offer for the sale of their apartment because they found a home ‘they fell in love with’ and need the cash from the sale to make the purchase.
There is nothing wrong with trying to complete a simultaneous transaction, and we have helped many clients accomplish this. Here’s my advice for winning when you want to sell and buy at the same time:
It is extremely valuable to have a backup plan for temporary housing so that you don’t feel rushed in making a decision on purchasing or accepting an offer. When you get to the point of negotiating your purchase and sale, knowing that you have a backup plan in your pocket will let you negotiate both sides of the transaction with confidence.
If you need to sell your apartment for the equity to buy a new apartment, it’s good to know approximately what your dream home will cost, as well as get an estimate for what your current home is worth. Keep in mind that although a home you see on the market now will most likely not be around when you complete your sale, it should give you a ballpark figure so you can manage your finances and analyze whether you will cash out enough on your current home to purchase your next. In some cases, we are hired by clients to sell their home, but once we start the process of looking to buy, they find out that they can’t get what they want. Sometimes we advise them to simply take their home off the market until they have more money in the bank, and sometimes they have to adjust their expectations and settle for a property at a lower price point. Such an analysis is much easier when conducted before someone lists their home, rather than after.
Don’t leave too much time between the sale and the purchase. I once had clients sell their apartment and then come back into the market two years later expecting to purchase a larger space. In the meantime, the market had gone up 10% and they could no longer afford to buy what they needed. While doing a simultaneous transaction with no backup plan is risky, waiting too long between your purchase and sale can be disastrous as well.
If you are looking to purchase in a co-op and will not have already completed your sale, make sure the co-op board will approve the transactions. Some co-ops might fear that you will have difficulty selling and won’t approve your purchase. Depending on the circumstances, there are many ways to handle this scenario — contact Meier Real Estate to discuss the right strategy.
– The Meier