North Carolina’s Triangle area is a prime place to own a luxury home. Sought-after residences range from mansions in Raleigh’s historic Hayes Barton neighborhood to elegant Montclair single-family homes just outside downtown Chapel Hill.
1. Hire a skilled realtor who understands the local property market
An essential step in preparing for simultaneous homebuying and selling is choosing a realtor with unparalleled marketing acumen, superb negotiating skills, and an excellent track record. Unless you were thoroughly impressed by the real estate agent who represented you when you purchased your current home, hire a new one to assist you with the simultaneous purchase and sale process.
Winnow down referrals from loved ones, friends, and colleagues to a list of at least three candidates. Scrutinize their client testimonials
and online marketing materials. Request references. In face-to-face interviews with each prospective hire, ask questions that will help you make judgments about these criteria:
Which realtor has the strongest work ethic?
Which realtor can you most confidently rely on to be consistently diplomatic at the negotiating table and always candid about telling you what you need to know instead of what they think you want to hear?
Which realtor has a personality that’s most compatible with yours? You need to be able to build an excellent professional relationship with each other because you’ll be spending a considerable amount of time together.
2. Select a strategy that suits your situation
Coordinating same-day purchase and sale closings is stressful in the current real estate market. It’s easier to complete one transaction before the other. The real estate agent you hire should help you assess which of the following strategies better suits your situation.
Find a home to buy, then sell the house you own
By embracing this strategy, you can avoid the problem of being left without a place to live and needing to rent a residence month-to-month while you complete a purchase deal.
It’s likely to be more challenging to buy a property than to sell the one you own because of the strong demand for Triangle area homes. According to data from the Durham Regional Association of Realtors, inventory is tight
, and homes remain on the market for a short time. Your realtor might advise you to tackle the more difficult task first.
Find a buyer for your current home, then purchase another house
By embracing this strategy, you avoid the annoyance of having to carry two mortgages at the same time. You can use the net proceeds from the sale of your current home to cover your down payment and closing costs for the residence you buy.
3. Line up your financing
Getting your financing in order is a critical early step in your simultaneous buying and selling process.
Obtain a mortgage preapproval letter
Before you begin house hunting, find a lender who will preapprove a mortgage for you and give you a mortgage preapproval letter
to present to home sellers. The letter should state that receiving this mortgage is not dependent on closing on the sale of your current home.
Decide whether you need a bridge loan
If you’re buying a home before selling your current residence, you may need money for a substantial down payment, which you would already have if you were to sell your current home first. Your financial advisor can help you determine how best to handle this situation.
One option is to seek a bridge loan
, which is short-term financing secured with your current home’s equity. You repay the bridge loan after completing the sale of your current residence. To get a bridge loan, you’ll probably be expected to have built up at least 20% equity in the property.
Or, instead of a bridge loan, you can obtain cash for a down payment by taking out a loan against an investment account
such as your 401(k). Your mortgage lender does not consider an investment account loan as debt when determining your debt-to-income ratio during your mortgage preapproval process.
A third option is purchasing a home with a low down payment
. After selling your current property, you make a large lump-sum payment on the principal balance of your new home’s mortgage and have the loan recast.
4. Start home repairs immediately
Don’t delay repairs and home improvements until it’s time to put your current property onto the market. Get to work right away.
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Do a pre-listing inspection
Hire a home inspector to conduct a pre-listing inspection
and determine whether you need to do repairs. If you promptly complete any required work, your property will be more likely to pass muster when you find a buyer and send in their home inspector.
Consider cosmetic improvements
Consult with your realtor about which minor interior improvements, such as fresh paint and new light fixtures, could potentially bring higher offer prices.
Boost your home’s curb appeal
Look to your landscaping as one means of enhancing your property’s curb appeal, thereby possibly increasing your sale price. Improvements to your home’s exterior could be as simple as replacing your mailbox or painting your front door a jewel-tone color
. Contact a landscaper and other professionals immediately, even if you don’t need their services directly.
5. Devise efficient house hunting strategies
To prepare for efficient online home searches, make separate lists of features your new home needs and amenities you want but don’t require. Block out time in your daily schedule to focus on your internet house hunt.
Communicate your wants and needs to your realtor so they won’t show you houses you’re not interested in. Set up a spreadsheet
for taking notes about the showings you attend.
6. Be prepared to make a competitive offer
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When you find a home you wish to buy, your realtor will do a comparative market analysis
to determine your offer price. Be prepared to be generous with that offer. The analysis will focus on data about recently sold residences near the property you are bidding on — ideally within the same school district. These comparable homes’ ages, conditions, square footage, lot sizes, number of bedrooms, and special features will be similar to those of the house you’re attempting to purchase.
Be willing to include perks to make your purchase offer more appealing to the seller. For instance, your realtor might suggest adding a free seller rent-back agreement
that would allow the current owner to stay in the home for 30 to 60 days after you close on its purchase.
7. Consult your financial advisor before negotiations begin
In this tight real estate market, your realtor needs room to negotiate on your behalf if the home seller makes a counteroffer
. You should be flexible about your offer’s terms and conditions and willing to pay more than your offer price.
Nevertheless, remember that homeownership is an element of your wealth-creation strategy. The property purchase you’re about to make should be a step forward in attaining your wealth-building goals, not a step backward. Discuss this matter with your financial advisor before negotiations begin, then tell your realtor about the counsel you’ve received.
Factoring in the net proceeds you can reasonably expect from the sale of your current home, what price limits should you set for your home purchase? Your financial advisor should take a conservative approach and assume the property you now own will sell for a lower-than-expected price.
Setting a price limit for yourself will guard against being driven by emotions and ego to overpay for the house you are trying to buy, which might otherwise happen if you get into a bidding war. Going overboard on the purchase price could saddle you with hefty mortgage payments. And if the home is appraised for less than your accepted offer price
, the amount of your mortgage loan will be reduced — and you'll be obligated to make a larger down payment.
8. Decide on a launch date for your listing
You and your realtor should decide on a target date for listing your current residence for sale. One option is to put the property on the market once you sign a purchase agreement for the home you’re buying and have it inspected.
9. Clear the clutter from your home
It takes time and effort to make your home look move-in ready. To achieve this goal, you must take two additional steps beyond repair work and interior and exterior upgrades:
Put your house in order
Everybody in your household who is old enough to do so should sort through their possessions well in advance of your listing date. Give unwanted items to charity and rent a storage unit for furnishings you want to keep.
Hire a home stager
Your realtor can set you up with a home stager
who will rearrange your furniture, take half the clothes out of your closets, and send family photographs and memorabilia to your storage space. The purpose of staging is to give your home an inviting ambiance and depersonalize it so prospective buyers can imagine living in it.
Staging prepares your residence for photo and video shoots as well as showings. You need Instagram-worthy pictures and drone footage for your listing, your realtor’s website, and social media posts.
10. Plan ahead for home showings
Once your current home is on the market, get organized so you’ll be ready to show the property on short notice.
Devise a checklist for locking up valuables
Install a large safe for laptops, documents with personal information, prescription drugs, jewelry, and other portable valuables before showings. Lock your desk drawers and your wine refrigerator. Make a checklist of items that should be stowed away
. If you have pets, their beds, toys, and food dishes also belong on the list. Raleigh-Durham is a dog-friendly place, but some house hunters are allergic to pet hair.
Have a cleaning service on call
You had your home deep-cleaned before it was staged. Nevertheless, you need professional cleaner
s to come in before your showings and put your home in perfect shape.
Line up out-of-the-house activities
Pre-plan adventures you can enjoy with your children during showings in good weather
. Make advance arrangements for admittance to dog daycare
if you have dogs.
11. Brace yourself for a bidding war
If your realtor sets your property’s list price below its estimated fair market value, they’ll increase the chances of attracting multiple offers and possibly igniting a bidding war
. Your realtor will take charge of the proceedings.
12. Find a moving company that’s flexible about booking dates
It’s best to line up your moving company eight weeks
before the sale closes on your current home, especially during the summer, when movers are busiest.
Is it time to start your simultaneous buying and selling process?
Simultaneous homebuying and selling is complicated. To guide you through the process, you need a real estate agent with intelligence, integrity, and unwavering commitment to their clients. Realtor Trish Lowe
will provide superior service and expertise at every step. Contact the Trish Lowe Group today
.*Header photo courtesy of Shutterstock