Our Real Estate Guide: What to Do When Buying & Selling a Property
The real estate market is quite challenging to navigate. Whether selling or buying a property, there’s just a lot of things to consider—looking for prospective homes or putting your house in listings, negotiating with potential clients, preparing all the paperwork, performing inspections, settling finances, and closing the deal.
But what about buying and selling your property at the same time? Taking this route to invest in a property can be all the more complicated, daunting, and confusing. Fret not, however, as we’ve prepared a rundown of practical steps on how to buy and sell your home.
1) Evaluate the Current Situation
As with any pursuit, planning and preparation are the key, and they both apply to the real estate industry as well. Before you take the plunge into buying and selling a property, check the real estate market first, and assess the current situation. Some of the right questions to ask are the following:
- Is it the best time to invest in property?
- What location holds a better market value?
- Is the industry booming in your locality?
- What real estate trends are “in” today?
The best course of action is to hire an experienced and highly reputable realtor to answer all these questions. With his industry knowledge, negotiation skills, and level of expertise, he’ll help you decide on your property investment.
2) Factor in Your Next House’s Pricing
Of course, you want to ensure that there’s a huge difference or at least a cushion between the property you’re selling and the house you’re buying. The rule of thumb is to get more from what you sell and use less money for what you’ll buy. Otherwise, it defeats the purpose of taking this property investment route in the first place. Ultimately, be sure to cover your property sale price with your home purchase.
3) Consider a Contract Contingency or Bridge Loans
For the most part, it’s best to immediately sell your current property to use the money for your purchased home’s down payment. When it comes to this, you have the option to consider the following:
- Contract contingency: Also known as conditional sale, this ensures that a new home’s purchase will depend on your existing home’s sale. However, know that this route can be a bit dangerous, particularly if you aren’t careful. It’s best to assure your seller that you’re in a desirable market, and the price is right while ensuring your property gets sold as quickly as possible.
- Bridge loan: This allows you to own two homes at the same time, particularly if you don’t have the money for a second down payment yet. As compared to the former, this can be a less risky and more viable option to take.
Ultimately, it’s best to weigh both options and see what works for you!
4) Get a Mortgage Pre Approval
For the uninitiated, a mortgage pre approval happens when a loan officer checks your finances, such as your income, debt, assets, and credit history. The officer then determines how much money you can borrow and what your monthly contractual payment and interest rate will be.
As the real estate process of buying and selling takes time, it’s good to have a mortgage pre approval. Should the transactions start, you are assured you’ll get proper funding from your lender.
At this point, you now know how to proceed with buying and selling a property simultaneously. As recommended above, be sure to evaluate the current situation, factor in your next house’s pricing, consider a contract contingency or bridge loans, and get a mortgage pre approval.
Furthermore, it’s best to work with a highly reliable realtor who will assist you every step of the way. All these will set you on the right track and have a smooth real estate journey!
Are you looking to buy and sell a home in Canada? We’ve got you covered with our new homebuyer’s guide for properties in Edmonton and the surrounding areas. If you need real estate tips for buyers and sellers, browse through our articles, or schedule a free consultation now!