When you decide to sell your apartment, you now need to think about where you’re going to live next. For sellers, it can feel overwhelming to take on selling your current residence and buying a new simultaneously. While it is a complicated route to take, it is possible to do both if your organized, use a few tricks, and have some extra cash.
Besides the logistics of the move, there are a few things you should consider through the buying and selling process, as well as the negotiating process, to help your move go as smoothly as possible.
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Evaluate your cash flow
The first step to making buying and selling at the same time easier is to evaluate how much liquid money you have at your disposal. A typical downpayment is no less than 20 percent of the agreed-upon sale price, so you’ll need that to secure your new condo or co-op apartment.
If you have enough money for the downpayment on the new apartment, before selling your current residence, this makes the process much easier for you. As soon as you find your new ideal home, you can buy it because you’re not waiting for the other sale to close. If you don’t have enough cash for this, you’ll likely need to move into temporary housing or rental unit before buying your new home.
You could also look into a bridge loan, which enables the bank to cover your downpayment on the new apartment until your current apartment sale closes. However, bridge loans are often risky for the lender and buyer, so in the competitive New York City market, they are not as commonplace.
Depending on your family and friends’ situation, you could ask for a personal loan to secure the 20 percent downpayment until the sale on your current home closes.
Request an extended closing
If you plan to buy before selling your current apartment, requesting an extended closing date can help you use your apartment’s equity to buy the new one. However, to execute this process in good faith with the other party in the deal, you’ll want to communicate this desire right away. If you ask for an extended closing in the middle of the process, you’ll risk complications with the seller.
You’ll also only want to go this route if you’re sure your new apartment will sell within the negotiated contractual timeframe. While some sellers may be open to extended closings if they are also trying to find a new home, this situation works best in a buyer’s market with little competition.
Have your co-op board packet ready
For anyone who purchases an apartment in a co-op building, the co-op board reviews each applicant’s complete finances. So, if you own another apartment while trying to buy a new one, the co-op board will be aware of it. Some co-op boards don’t feel comfortable approving applicants with two apartments if your finances don’t reflect a stable pathway to owning both places long term.
If the co-op board does not care as much about this, it’s still good to know that waiting to pass the co-op board interview for your new apartment could delay closing. So it’s a good idea to compile your board package as soon as possible to help expedite the process in any way within your control.
Choose an experienced real estate agent
In almost all cases, it is a good idea to have a seasoned real estate agent on your side, but when you are buying and selling at the same time, this is especially true. A real estate agent can help you manage the logistics of closing on both apartments, negotiate with the seller and buyer on timing, and help you get the best deal for both homes without feeling rushed or pressured.
Unless you’re moving out of state, keeping the same real estate agent for both transactions can help you minimize agent costs and headaches. Your agent can communicate with both your buyer and seller that you’re moving and ask for leeway with closing dates to make both sales work. Having the same agent can also help keep your agent in the loop about the logistics of when you need to move by on both sales.
Have a backup plan
While it is possible to sell your current apartment and buy a new one at the same time, to save yourself some stress, have a backup plan. It’s essential to keep in mind that you’re not the only person moving in these sales, and three different families or couples will need to move apartments simultaneously to make this work. Perhaps for a night or two, you might need a storage unit or to stay in a hotel.
If your buyer for your new home falls through, consider renting out your old place on a six-month lease until you’re settled in your new home and can re-focus your selling efforts. If a problem arises with your new home, you and your family can rent temporarily until the new place closes.