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Guide to Selling and Buying a Home at the Same Time

Selling your home and buying another house can feel like a juggling act, especially for Veterans and service members using their VA entitlement. Whether you receive a new job, want to be in a nicer neighborhood or simply need more space, trying to sell your current place and find a new one to move into can get complicated fast.

Ideally, your next home is ready to move into as soon as you sell your current home. However, this isn’t always the case, and the time between selling and buying a home doesn’t always align the way you hope.

Let’s explore the different options for selling and buying a home simultaneously and some steps you can take to simplify the process.

Should I sell my house before buying a new one?

Whether or not you should sell your home before buying another will likely depend on your financial stability, current market conditions, and personal preferences.

Generally, selling first allows you to use the cash for a down payment, potentially lowering monthly payments or improving loan terms. It’s important to consult your Realtor on market conditions and selling timelines to decide what are the best next steps for you.

Neil Brooks, a real estate agent within the Veterans United Realty Network and with My Home Group in Scottsdale, Arizona.

“You should decide whether it’s best to rent temporarily or find a new home before closing on your current home,” says Brooks. “Additionally, selling your home prior to buying a new one or if it’s under contract boosts buying power and reduces risk to the sellers.”

Let’s look at the pros and cons of selling your home before buying a new one.

Selling a House Before Buying

Pros Cons
One mortgage payment Need temporary housing
Easier to qualify for a new home Risk not finding a home that fits your needs
Use sale profits for a down payment May have a stricter timeline

For homeowners with an existing mortgage, selling before buying may be an excellent option to avoid the burden of two mortgages. Selling your home with a mortgage first prevents financial strain and avoids a potentially high DTI ratio that could impact your ability to qualify for a new mortgage.

However, keep in mind there are still some costs when selling your home. You can also use the proceeds from your home sale to cover these fees or for a down payment on your new home.

While selling first eliminates some risk, it may leave you without a proper living situation and require temporary housing solutions. This could be a strategic move, allowing for more flexibility in finding the perfect new home, but it also adds the inconvenience and cost of moving twice.

“If you qualify for a new home without selling and don’t need the proceeds for a down payment, you can shop without temporary housing or time constraints,” says Brooks.

On the other hand, buying a house while still owning your old one may be better in some cases. Here are the pros and cons of buying first.

Buying a House Before Selling

Pros Cons
No temporary housing Two mortgage payments
Fewer moving expenses Struggle to come up with a down payment
More time to move High debt-to-income (DTI) ratio

Buying first can ensure you have a new home to move into directly, reducing the stress and logistical challenges of temporary housing. In a seller's market, having already secured a new home can be a significant advantage, allowing you to sell your current home without pressure and potentially at a higher price.

However, carrying two mortgages can be financially challenging and requires solid planning with the potential for a contingency plan. Multiple mortgages can inflate your DTI ratio, potentially affecting your credit score and ability to qualify for other loans. If your current home does not sell as quickly as anticipated, you may face prolonged financial pressure.

There are also potentially significant considerations for Veterans and service members who might want to reuse their VA loan benefit for the new purchase. You won’t have the full reach of your benefit until your current VA-backed home is sold and the loan gets repaid in full. Getting that entitlement restored before closing on a new purchase gives you the full reach of your zero-down buying power.

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How to Buy a House While Selling a House

Whether you decide to sell your current home first or buy a new house first, there are specific steps you must take to ensure a smooth and successful move.

1. Assess Your Financial Situation

It’s very important to start by evaluating your credit score and income. These factors are crucial since they influence your mortgage interest rate and how much you can borrow. A higher credit score can lead to better loan terms, so it's worth checking your score well in advance to correct any errors and improve it if possible.

Since you’ve already purchased a home, it’s essential to figure out how much equity you have in your current home. Equity is the difference between what your home is worth and what you owe on your mortgage. This amount significantly affects how much money you'll have for a down payment on your next home.

Before you start looking for your next home, get preapproved for a mortgage. While most repeat homebuyers understand the importance of mortgage preapproval, it can improve your purchase timeline and give you peace of mind.

2. Understand the Market

The current housing market can greatly impact your timeline when buying and selling a home. In a seller's market, your current home may sell quickly and for a higher price. This can be advantageous but may also mean facing higher prices and competition when buying your next home.

If you're purchasing in a buyer's market, you could find yourself in a position to negotiate a better deal on your new home. However, selling your current home might take longer and for less profit.

3. Prepare Your Home For Sale

Understanding what to do before listing your home can make it more appealing to buyers. Consider making necessary repairs that could deter buyers or affect the home’s sale price. Staging your home or arranging it to highlight its best features can also make a big difference in how quickly it sells and for how much.

4. Find a Trusted Real Estate Agent

Even if you've bought or sold a home before, a trusted real estate agent is always helpful. They can help narrow down or improve your home search, negotiate terms and navigate complex situations like the home sale contingency clause. This clause is common when selling and buying a home at the same time and makes your offer on a new home dependent on the sale of your current one, which can be a deal-breaker in competitive markets.

5. Coordinate and Close on Both Homes

It’s necessary to keep both your buyer and seller informed of any changes in the timeline. Good communication can prevent misunderstandings and keep the process moving smoothly.

Try to align your moving dates as closely as possible with your closing dates to avoid the need for storage or temporary housing. Also, make sure all details are correct on both the buying and selling sides. It’s crucial to catch any errors before closing. Sometimes unexpected issues arise at closing, so stay flexible and have a backup plan just in case.

With the right approach and preparation, buying a new home while selling your old one can be a very rewarding journey.

What if I have trouble selling my home?

Selling your home can be difficult, but there are ways to improve your chances of securing a buyer. First, ensure your home is adequately priced by comparing it to similar properties in the neighborhood. An overpriced home can deter potential buyers, so it's critical to adjust your pricing strategy based on the current market trends and feedback from a local real estate agent.

Partnering with a skilled real estate agent is perhaps the best solution if you have trouble selling your home. A good agent brings invaluable expertise in pricing, marketing and negotiation. They can suggest creative solutions like lease-to-own options if the traditional selling approach doesn't work. They can also leverage their network and resources to widen your home’s exposure to potential buyers.

Effective marketing is also important for attracting buyers. Investing in professional photography and staging can make a world of difference by showcasing your home in the best light. You can also touch up on your open house etiquette. A great open house is key to helping potential buyers envision themselves living there.

These actions can significantly enhance your home's appeal and lead to a successful sale, even in a challenging market.

Buy and Sell With Veterans United

Buying and selling a home at the same time can be very overwhelming, and Veterans United is here to help! Get a lower interest rate and unlock huge savings when you buy and sell with a Veterans United Realty agent and finance with Veterans United Home Loans.*

Talk to a Veterans United loan expert today at 1-800-884-5560 to discuss your options.

*Veterans United Home Loans and Veterans United Realty offer "Buy, Sell and Save," a bundled service program for Veterans United Customers. Eligible Customers will receive a lender credit equal to one-hundred (100) basis points of the loan amount, which may be applied to either rate or closing costs or a combination of the two. Depending on market conditions, one hundred (100) basis points is approximate to one-half (.5) of a percentage point. For example, assuming optimal market conditions, an eligible Customer would see their Loan rate lower from 6% to 5.5%.

Eligible Customers must fulfill the following requirements to be eligible for the offer: a) list a home for sale with a real estate agent through Veterans United Realty's referral network, with listing to occur no later than ninety (90) days after the closing of the purchase of the new home, b) purchase a home with a real estate agent through Veterans United Realty's referral network, and c) obtain thirty (30)-year fixed rate financing for the home purchase with Veterans United Home Loans.

Exclusive listing agreement must be provided and must include an expiration date that extends past the closing date of home purchase, and which affirmatively states a listing date of no later than ninety (90) days after the closing of the purchase of the new home.

All real estate agency agreements must be in the name of the Customer and/or co-borrower. If the home listing sale closes prior to purchase of a new home, the Customer may elect to delay the application of the offer to the purchase of a home at a later date, subject to the home purchase closing within twelve (12) months from the closing date of the home listing sale (with any benefit being forfeited if the purchase closing does not occur within such twelve (12)-month period). In the absence of an election by the Customer, the application of the offer will be delayed pending, and subject to, a timely purchase closing, if any, as described above.

This offer is not applicable to USDA loans, second lien loans, down payment assistance, or Bond Programs. Cannot be combined with other offers.

This is not a solicitation if you are already represented by a real estate broker.

**Average savings example is based on 680+ credit score, example 7.5% Interest Rate, and $300,000 loan amount; actual monthly savings will vary according to the Customer’s financial situation.

About Our Editorial Process

Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nation's Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.

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