When you are both selling and buying properties there are several things you should take into consideration before and during the transactions.
Contingent Offer
If you must sell your current property in order to buy your next property it is typical to submit your offer to purchase with a contingency clause. A contingency on the sale of your home in the contract basically says that you will only purchase the new property if your current property sells by the date specified. This contingency puts the seller at higher risk. Because of the extra risk, many sellers, especially if it is a second home they are selling, may refuse to accept a contingent offer. Often times, the only way the contingent offer is accepted, is if the house will remain on the market and open to other offers. Then, when another offer is received, the seller can ask you to remove the contingency on the contract or they can terminate the contract and accept the second offer.
There are other alternatives besides writing a contingent offer or ways to make your contingent offer less risky for the seller that should be discussed with your real estate agent up front.
1031 Exchange
If the property you are selling has not been your primary residence for at least two years you may be eligible to exchange your property allowing you to defer any taxes due on the profit from the sale. More 1031 Exchange information.
Market Fluctuations
Real estate decisions you make may change based on the current real estate market. Be sure to discuss the market with your real estate agent and how it may impact the timing of your sale and/or purchase, pricing, and your expectations. For example, if you are selling in a market with low inventory, finding a replacement property may be difficult. Discuss a strategy with your agent so you don’t sell your home and then are unable to find another to buy leaving you homeless.
Buyer Resources
Be sure to take a look at our Buyer pages for information on the buyer side of the transaction.
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