When it comes to buying and selling real estate, timing is of the utmost importance. Unfortunately, it’s also a topic few people truly understand. The following are some tips to keep in mind when speaking with your real estate agent.
Sell before buying or buy before selling?
It’s an age-old question, but asking a few strategic questions might enable you to narrow your decision down to the right choice for your individual situation.
Is selling or buying a necessity or do you have some flexibility?
Job relocation, change of marital status or other life situations often require a relocation within a specified period of time. Equally important are the needs of the other party. Work with your agent to understand the opportunities and limitations of both sides in order to create a win-win situation.
Buying before selling typically benefits those who simply must move or relocate within a specified period of time and who are unable or unwilling to lease or rent. It is also a popular option for those seeking an exchange of property under Section 1031 of the U.S. Internal Revenue Code or for those who are attempting to minimize taxation via other deals.
Can you obtain financing or afford to carry both mortgages for any period of time?
If so, you may have a little more flexibility at your disposal. Speak to your agent about a leaseback or other temporary term. It’s often possible to use these when negotiating terms.
Selling before buying can benefit those who are unable to obtain financing with an existing mortgage in place or who wish to use cash proceeds from the prior sale to fund repairs, renovations or an entire purchase.
In many instances, it is possible to arrange a simultaneous closing for both the home purchased and the home sold with contingencies that reflect this situation on both transactions.