Selling before Buying

If you feel overwhelmed at the thought of this ... that's normal! 

Timing and Strategy is key! 

Now let's break it down...

If you need to sell first to buy or just simply want to, let's start by saying the further you are in the selling process, the less risky your buy will be as far as closing goes. On the Offer to Purchase, there is a section of the contract that asks if your purchase is contingent on the sale of another property and then proceeds to ask what stage it's in: not listed yet, currently listed on the market, and then currently under contract and it will also ask for the address of the home as well as if the OTP is accompanying the offer if it is currently under contract. 

Now if you're buying New Construction there's a large chance the builder will not require your home to be on the market if you're months out, just keep in mind builder deposits tend to be non-refundable. You will want to list allowing for extra time and also look into any fees the builder can charge if you do not close on time and how they compare vs fees you may incur closing a little early and having your belongings packed up for a little longer, staying somewhere else, etc. 

Things to keep in mind: 

Try to keep DD deposits balanced OR the DD deposit on the sell more than the buy if possible so if "worst case scenario" happens, you're not out or in the negative. (see my blog post on Due Diligence Deposit — ThriveHouse Realty and Earnest Money Deposit — ThriveHouse Realty) 

Rent Back - this can be negotiated at time of contract and can last for any amount of time or any amount that both parties can come to agreement on. 

Closing Date flexibility - The NC Offer to Purchase allows for each party to delay up to 7 days without repercussions, anything earlier than closing day or later than 7 days requires both parties to agree and have a new document signed. *Keep in mind, this can be used on both ends*

Be mindful of non-refundable moving costs and plan strategically. Movers can book up and you do HAVE to be out of your home by closing (unless a rent back was negotiated) but I would try to find that sweet spot once big items have been completed (think appraisal, inspection is back and repairs have been negotiated, etc). 

If you are able to qualify without being contingent, you may be able to do a 5% down loan and then Refinancing or Recasting once you close and get your equity out. This is a great Plan B or second option to keep in your back pocket if you don't want to pay 2 mortgages but can technically qualify. Refinancing will require closing costs and can change the rate but recast usually has a much smaller fee and maintains the same rate. **Consult your lender for fine print on their products and make sure your Realtor and Lender are both working together to find the best option for your specific situation**

All in all, my biggest advice is to listen to your Realtor, know and understand the contract terms and how you can use them to your advantage and protect your interest on both sides. 

As always, call, text or email if you ever have any questions or want to talk through a scenario!