Buying and Selling a Home at The Same Time Without Stress

This guide covers buying and selling a home simultaneously without stress. The team at Gustan Cho Associates are experts in helping mortgage borrowers buy and sell a home simultaneously without stress. In this article, we will provide information about selling your home.

With the spring 2024 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 trying to sell their homes 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 a 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 it on the market.

There were quite a few scratches from my dog and everyday life. This coat of paint gave a fresh feel throughout the entire property’s interior. The overall project cost me about $300 and, in my opinion, increased the value by a few thousand dollars. The fresh coat of paint also made my property eligible for FHA financing.

How The Condition of The House Affects the Home Appraisal

FHA and VA loans are more strict regarding 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 buyer had asked me to replace the floors before moving in, but we negotiated a $3,000 credit to offset the repairs.

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 gave 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 agent’s best friend. Once you receive the inspection report, other items may need to be addressed, opening up more negotiations. Your contract has an inspection time frame clause (usually 5-7 days) to complete this process.

Importance of Hiring a Realtor When Buying and Selling a 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. For more information, please check out our blog on BENEFITS OF HIRING A REALTOR.

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 use a mortgage loan to buy your property. So, the process from accepting the contract to closing is typically 30 to 45 days.

You must give the buyer access to your property to complete a home inspection during this time. The home inspector will go through the property and expose any needed repairs.

An appraisal will also be completed to determine your property’s value. Please see our APPRAISAL VS INSPECTION BLOG to understand the differences. Once you have completed the home inspection, a second negotiation process opens up. For example, the wood floors needed repair during my home inspection of the townhome. That is when the $3000 seller credit was added.

The Importance of Appraisal When Buying and Selling a 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 was 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. 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.

The Key To Avoiding Stress When Buying and Selling a 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 ensure your buyers are qualified to purchase your house. It is critical that they hit your closing date on time.

If, for some reason, their financing falls through, or if they ask for an extension, you cannot 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.

This is 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. Selecting a lender who knows the importance of timelines and can execute on time is important.

Mortgage and Underwriting Process

The mortgage process for buying and selling on the same day differs from a regular one. 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. 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 contact your listing agent and have them follow up with the buyer’s lender to ensure their loan is on track for the closing date.

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 a Home at the Same Time

There is a lot of information in this article. We are the experts. Please get in touch with Gustan Cho Associates at 262-716-8151 to discuss how to sell your home and buy your next home on the same day. We have been doing this for a long time and know how stressful the process can be. We can even underwrite your qualifications before you put your home on the market. 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.