When it is time to sell a dwelling, many homeowners ask the same question. Is selling and buying a home at the same time possible? The short answer is yes, but it can get complicated. Keeping three critical points in mind will help you navigate the process: 

  1. Hiring the right broker.
  2. Understanding your down payment options.
  3. Nailing the timing of two closings.

What to do if you can’t sell and buy simultaneously? Fear not, we have tips for that too.

Table of Contents

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    1. Finding the Right Broker

    The best person for the job is a top-notch communicator who can balance selling and buying at the same time.

    “A good broker will set the stage for your ideal interests during negotiations, and then keep the deal on track,” says Kelsey Martin, a licensed real estate salesperson and co-founder of The Davidson Martin Team at Compass. “Daily check-ins, deadline reminders, and status updates need to be communicated to many parties, including the attorneys, mortgage broker, property manager, and of course, the client.”

    Ideally, your broker will have prior experience transacting in the building, providing a sense of how long a purchase application will take to be reviewed and approved. Equally important is not setting unrealistic expectations for how quickly a transaction can be achieved. 

    “Attorneys use the term ‘on or about’ as a 30-day buffer for legally going past a deadline without penalty,” says Martin. “A good broker should similarly take a conservative approach when offering clients guidance on preparing for moving day.”

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    2. Buying a Home Without a Down Payment 

    It’s a catch 22. It would help if you had a down payment to buy a new home, but you won’t have the cash until your current place sells. What to do? There are options. 

    Find a home with a mortgage pre-approval that has a sale contingency

    “A pre-approval letter with a mortgage contingency will let all parties know upfront that the offer is based upon the sale of the buyer’s home,” Michael Sema, Founder, and CEO of Get A Rate, tells us. While this is an ideal situation for the new home buyer, the offer might not be as attractive to the seller, especially in a competitive market.

    Get a bridge loan

    “It’s based solely on the value of the property you’re selling and lets you tap into that equity to cover the down payment on the new home,” says Richard Barenblatt, mortgage specialist at GuardHill Financial Corp. “A bridge loan is an interest-only loan, so it keeps costs down. But because it’s designed as a departing residence, it means that there is an immediate need to sell. That’s why the maximum term is 12 months.” 

    Refinance and use the liquidity

    “With interest rates being so low, refinancing or a bridge loan on your current home to pull out equity could be a good solution,” says broker Bill Kowalczuk of Warburg Realty. “Refinancing can help you pull equity out of your home so that you can purchase another.” 

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    3. How to Schedule Two Closings

    Ok, so you’ve figured out the finances of selling and buying a home at the same time. Now, how do you work out the perfect timing between closing on the home you just sold and the one you’re going to buy? Not surprisingly, it can be tricky. Success depends on several factors outside the scope of control for both seller and buyer parties. Cue the real estate lawyers.

    “Lawyers can fine-tune these details in a contract allowing the seller a certain amount of time to remain in the home with the cooperation from the buyer and the buyer’s legal team,” says agent Rowena Dasgupta of Warburg Realty. That would, in turn, allow the seller who is purchasing a new home to work with a specific timeline, within their comfort zone, to close on their new home.

    Karen Davidson, a licensed real estate salesperson and co-founder of The Davidson Martin Team at Compass, notes that in this scenario, each side can “adjourn” the closing up to 30 days from the initially scheduled date before being in breach of contract. “Regardless of how precise we are, there is always the chance that there will be a few weeks gap,” she says. 

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    4. What to Do if You Can’t Sell and Buy Simultaneously

    Selling and buying a home at the same time isn’t viable for everyone. If you find yourself in this scenario, don’t worry. You have options.

    Rent a temporary place

    It will relieve some of the pressure, and lucky for you, short-term leases are plentiful in NYC. Good resources include Avalon Communities and Airbnb. “This takes away any of the anxiety of coordinating closings as well as giving people a chance to try out new neighborhoods,” says Davidson. 

    Do a leaseback 

    “You can do a leaseback with the apartment you’re selling, allowing you to rent back your home,” says Davidson. “By staying in your current home and renting it back from the new owner, you can close on your new home without panicking.”

    Explore all your home selling options, from pricing your NYC apartment to finding a great agent, with these hassle-free tools from StreetEasy.

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