Buying a new house is an exciting moment in most people’s lives. It’s full of promise, anticipation, and design ideas. Selling a home is also a wonderful thing because it signifies you’re moving on to something better.
When you buy and sell a house at the same time, you’re dealing with a considerably more significant transaction. You have to be more cautious, and there is a greater chance that something may go wrong. While you can’t ensure that careful planning will result in a smooth transaction, there are a few things you can do to make things simpler. Here are eight mistakes you should avoid when you are buying and selling a home at the same time.
RELOCATING ON THE SAME DAY
It appears to be a fantastic idea to pack up in the morning, go to closing (on both houses), and then have the movers transfer your belongings to the new house, but this is a really tough logistical job. Even if your new house is just down the street, plan for a couple of nights in a motel or at a friend’s house, as well as a place to keep your belongings. Delays occur, and you should be prepared for them.
AGREEING TO TOO MUCH IN ORDER TO CLOSE THE DEAL
Don’t agree to something at the last minute only to get the business done. Be sure that you are comfortable with what you are agreeing to and that you are not being taken advantage of simply because you want to sign on the dotted line and move on.
Sometimes buyers or sellers will make a last-minute modification because they expect you’ll agree. That is something that the mortgage company might do as well. Simply say no, at least until you’ve given it some thought. Yes, it will cause a delay in your closing, but you don’t want to make a costly financial mistake.
ASSUMING THERE WILL BE NO ISSUES
Never expect that everything will go well, especially if you’re buying and selling a home at the same time. There will always be challenges, no matter how big or minor, until everything is signed and recorded on both houses. Keep it in mind, and you’ll be more prepared if something goes wrong and slows down the procedure.
The more you recognize that it may not be a fully seamless process, the better prepared you will be when something changes and you must adapt to keep things going forward. In the majority of circumstances, persistence will allow you to complete the transaction and keep it from falling through.
FAILURE TO HAVE A BACK-UP PLAN
Backup preparations are important. Where will you stay if your closing is delayed and you are unable to move into your new home as planned? What are you going to do with the moving truck full of your personal items? What if something completely falls through at the last minute?
While that is extremely unlikely — and terrifying to consider – you should be prepared in case it occurs. Have a backup plan in place and be ready to use it if necessary. Most transactions go smoothly, but you should still be prepared, if for no other reason than your own complete peace of mind.
PURCHASING HIGH-PRICED ITEMS PRIOR TO CLOSING
You may need furniture for your new home, but unless you’re paying cash, don’t run out and get it while you’re waiting for closing. While you may want to pay off your credit card debts with the profits from the sale of your home, that transaction has not yet occurred. You don’t want to add to your debt because that could mean your mortgage on the house you’re buying won’t be approved. So you don’t have to worry about qualifying and nothing goes wrong at the last minute?
ASSUMING THE DEAL IS FINAL BEFORE IT IS DONE
You may think that it’s a done deal after you’re under contract on both properties and things are moving forward. But if you’re not cautious, that could come arpund. Nothing is completed until everything is signed and documented by the county at the closing table. Then it’s final. It might still fall through until then. It’s unpleasant to consider, yet deals have already fallen through at the closing table.
There’s nothing wrong with guarded optimism and preparation, but it’s necessary to keep in mind that it’s not yet final so you don’t get ahead of yourself or make an expensive mistake.
FAILURE TO SECURE A BRIDGE LOAN
A bridge loan is intended to assist you in paying both mortgages while you sell your previous home. Even if you plan to sell and buy at the same time, if the sale of your present home goes through at the last minute, you may not be able to get a mortgage on your new property. Working with your lender to prepare a bridge loan, if you qualify, can ensure that the closing on your new house can still take place even if the sale of your current home falls through.
BECAUSE OF YOUR LOCATION, YOU ARE NOT PERFORMING DUE DILIGENCE
If you’re considering purchasing a home in another state, be sure you understand what you’re getting into. Some people buy houses without ever seeing them. There’s nothing particularly wrong with that, as long as you do your homework.
Learn about the neighborhood and get a thorough home inspection. Learn all you need to know before purchasing a home. It may cost a little more this way, but the time and effort are definitely worth it. The more you know about the home you’re considering purchasing, the more certain you can be that it’s the appropriate one for you and that you’re paying a reasonable amount for what you’re getting.