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Selling One, Buying Another In a perfect world, you sell your old home and buy the new one on the same day. Given that things rarely turn out perfectly, here are some things to keep in mind as you negotiate the sale of one house with the purchase of another.
Time it right
In the Daytona Beach area, our peak times for real estate sales are in direct opposition to most states. Winter and Summers are our busiest seasons, due to the seasonal residents and families who only want to move before school starts back. And if the closing dates for your purchase and sale aren’t going to coincide, a gap – rather than two mortgages – is the better. It’s easier and usually cheaper to find temporary housing than to juggle two mortgages.
Selling First
Selling your home before buying a new one minimizes financial hazards. Even if you have to find temporary housing, it’s generally cheaper than two mortgages. Get a Market Anaylsis from your REALTOR® first. That way you’ll have a good idea how the sale of your home will effect your purchasing power on the new one. This will help keep you from over extending your mortgage abilities. Also be sure to have your REALTOR® re-check the sales of your competition every couple of months, to be sure you're still at the right asking price. Get pre-approved on a loan for the new home. Until most of your contingencies have been met, wait to put an offer on a new house. You don’t want to be left holding the bag, or in this case, the house. If you’re ready to accept an offer on your home, but haven’t found the right new home, try to negotiate a long escrow or a sale/lease back. This will give you more time to look for the new home. Otherwise, look for temporary housing.
Buying First
It happens. You’re only thinking of buying, and suddenly the right home shows up. Now you have to sell your old home quickly. Here are some tips on making things work in your favor: Try negotiating a long escrow. You can also make the purchase contingent on your house selling. This works best in a slow market, but it’s worth a try in any market. You never know what may also work best for the seller of your new home. Try and schedule the closing date of your current home prior to the closing on your new home. Temporary housing is generally a better situation than two mortgages. Get a Market Anaylsis from your REALTOR®. Take a close look at what price you’re going to ask for your home. Make sure it’s realistic in the current market. Before accepting an offer on your home, make sure your buyer has been pre-approved for a mortgage. A pre-qualification is in no way a guarantee that a buyer can get financing! You don’t want any surprises that are going to delay things. If you’ve closed on the new home, but haven’t sold the old one, consider renting it out, or taking it off the market until the next season (or until the market improves).
Same Market or Across Country Generally, if you’re buying and selling in the same market, you can negotiate closing dates to work for you. But when you’re dealing with a cross-country move, it’s a lot harder. A REALTOR® really comes in handy at this point. Legal documents can be e-mailed, faxed or sent via overnight courier and your focus won’t be stretched to the limit. You may end up renting one home or the other, or have to consider a bridge loan. But with someone in the local market on your side, it will hopefully be less stressful. Show Me the Money Make sure you have a tight hold on, and a clear understanding of, your financial situation. Cash reserves are always helpful, but never more so than during the purchase of a home. Too many moves with storage costs can quickly eat up any profit you may have made in the transaction.
Two to three months is the recommended reserve, but if you don’t have it, this is where the bridge loan comes in handy. Some lenders are more inclined to make a loan if it’s for the purchase of a home. 
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