Do you want to make money flipping properties for profit? If YES, here is a complete guide on how to buy and sell a house at the same time with no money down. Learning to buy and sell a new home can be very helpful for you when you are looking to move from your old property to a new one and you don’t have the cash to buy a new home while still retaining ownership of your old home.
There is a lot of work that goes into buying a home – you have to search for a suitable property, handle the paperwork, the deadlines, and so on. Now when you add this to the equally overwhelming process of selling a home, it can be extremely challenging.
If you sell your home first before buying, you may end up with no roof over your head for a few months, and if you buy before you sell, you may also face some challenges especially overestimating the value of your property, and ending up with way less cash than you had hoped after closing.
It is possible to buy and sell a home at the same time but you may not be able to close on both houses at the same time. You may find your dream home, while your old home is still in the market, and vice versa. This means that the first challenge you would have would be how to time both deals perfectly, so that you can buy and sell at the same time without problems.
Here are some tips that you can use to make the process of buying and selling a home at the same time work.
How to Buy and Sell a House at the Same Time With No Money Down
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1. Use a ‘Sale and Settlement Contingency’ Agreement to Make an Offer on Your New Home
You can use a sale and settlement contingency to make an offer on your new home before listing your current home for sale. This can help you to avoid the challenges of not being able to find a new home to buy after selling your old one. You would be able to enter into a home purchase deal, but the deal would be based on closing the sales on your old home.
This means that you would only be bound by the contract if your current home sells but this method can only work in a non-competitive real estate market. Most sellers would not agree to a sale and settlement contingency agreement in a competitive market.
2. Use a HELOC or Bridge Loan to Purchase Your New Home
Except you are buying your new home for cash, it may be difficult to get a second mortgage on your new home without selling the old one first. In this case, you can use a Home Equity Line of Credit (HELOC) loan to fund the purchase of your new home, whilst still trying to sell the current home. Under a HELOC loan agreement, the lender can offer you a second loan for a new home based on the equity that you have acquired on your current home.
You can now pay off the loan after selling your current home. The short term of the loan would make it much more affordable, and then you can easily finance the purchase of a new home while trying to sell your old home so that you can have a roof over your head after selling your current home.
Another option is to purchase your new home with a bridge loan while trying to sell your current home. Bridge loans are short-term loans that can help to close the gap between the sales price of a new home, and a home buyers new mortgage in the event that the buyer is unable to sell the old home before buying a new one. Bridge loans can be used to fund down-payments and mortgage payments on your new home until your current home sells.
3. Rent Your Current Home
You can enter into an agreement with the buyer of your current home, so that you can rent the property for a few months (between 1 and 3 months) after sales has closed. This might help you prevent the inconvenient process of moving your things into a temporary accommodation until you find a new home to buy.
4. Rent a Storage Space
You can look for a cheap and safe storage facility to move your property into after selling your home, so that you can look for your dream home. This can take away the pressure to find a new home so that you can patiently work towards finding a new home for yourself. You can also look for a temporary accommodation to rent until you are able to get a suitable home to buy
5. Learn the Market
The real estate market fluctuates from time to time so you have to target a suitable time when you can sell your old home and still have some profit left for yourself even after buying a new home. This can happen if you can take out time to discover the best time to sell, and the most suitable time to purchase a new property.
6. Consult a Real Estate Agent Early
The earlier you consult your real estate agent, the better for you. Some of the factors that delay the closing of a home can be easily avoided when you talk to your real estate agent fast enough. They would help you handle the paperwork, recommend repairs, help you understand the current market, give you an idea of how much your home is worth, and how much you can expect to spend to get your dream home, and other tips that would make the process of selling and buying your new home faster
7. Delay Closing on Your New Home Purchase Deal
You can also find smart ways to delay closing on the purchase of your new home so that it coincides with the closing on the sales of your current home. Anything from mistakes and errors in the paperwork, dissatisfaction with the repairs made on the property, appraisal problems, insurance issues, and a number of other smart tactics can be used to drag the closing for a few days or weeks so that the funds from the sale of your old home can be used to finance the purchase of a new home.
However, you have to be smart about this so that you don’t end up catching a court case, and you have to select your buyer wisely- you could get into trouble if you select a buyer who is just like you; looking to drag the deal for as long as possible as well.
The whole idea is to get a serious buyer who is able to close the deal fast enough and seamlessly, so that you can use the proceeds to finance the purchase of a new home without having to incur extra costs of renting a temporary home.