Is it possible to buy a home and sell your home at the same time anymore?
And what should you tackle first? Should you get an offer on your home before you try to find a new place to buy? Or should you find the home you want before putting yours on the market? And will a bank even allow you to buy without selling anymore?
These questions are all valid because real estate has changed in the past few years. Before the real estate banking crisis of 2008, it was very easy to leverage the equity you had in your current home. By opening a home equity line of credit, known as a HELOC, you could borrow up to 95 or even 100 percent of your home's value and use that money as your down payment for the purchase of your next home. You could close on the new home and then sell yours immediately afterwards.
Nowadays, the equity in your home has likely slipped away and lenders rarely allow such leveraging. It's a new market and we have to find a new way to do things. It was stressful before and it can be even more stressful now. It's difficult to precisely time a real estate transaction but for many, the financial stakes are high.
Though there may be more stress and the process can be more difficult, there is still a way to buy and sell a home at the same time. However, before you begin, you need a well-thought-out plan, a good agent on your team and be fully prepared.
Of course, there are things you and your agent can do to increase the odds that your multitasking will pay off. Here are five tips to get you started:
1. Know your finances inside and out. This is a no-brainer. You need to know not only what you can afford to buy, but also, what your house is worth before you even get started. Talk to your real estate agent and consult a mortgage banker or broker for loan pre-approval.
2. Start packing. Start boxing up stuff you don't need easy access to. Get rid of all the things you won't need until you've moved into your new home. This will help make your home show better and starting the packing process now will make it that much easier to move later. You may need to rent a storage unit temporarily for your stuff.
3. Do whatever quick fixes you need to do to sell your home. Do you have a toilet that constantly runs? Is your kitchen right out of the 1950s? If so, get busy fixing those things that could cause your home to sit on the market longer than necessary or affect your home's value.
4. Start home shopping and learning the market. Start going to open houses and seeing what's out there. Begin the process of elimination: What are the must-haves and the deal-killers?
5. When you're ready, list it. Depending upon your situation, you might want to list your property toward the higher end of its value range, once you're actively in the market. This can buy you time while you shop for your next home. And who knows? You might get more money. (It still happens.)
Starting now helps reduce the stress later
From this point on, the situation can play out in any number of ways.
For example, you might find a home you love before you've got a firm offer on your house. In that situation, you could make the seller an offer with a contingency that your offer is subject to the sale of your home.
On the other hand, let's say you're the seller and someone has made a solid offer on your home. Great. But you haven't found your next home yet. Here, you might ask the buyer to let you stay in your home for a month or more as a renter, while you continue your house search.
There are hundreds of variables and the possibilities, depending on your local market and your personal and financial situation. The main thing is to do as much of the buying and selling homework as you can up front. This will help you react more quickly later. And best of all, you'll be less stressed.
Total population (2010): 1,130,490 Median sales price (Q3 2011): $224,300 % ch. median sales price (Q3 2010-Q3 2011): 7.3% Sales volume (# units sold Nov. 2010-Oct. 2011): 12,156 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -39.8% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 93 people Unemployment rate (Nov. 2011): 7.8% Foreclosure activity rate (Nov. 2011): 1 in 1,295 units Walk Score: 40
Despite a steep drop in sales, the Raleigh-Cary market saw considerable price appreciation last year, with its median sales price for single-family homes jumping 7.3 percent from third-quarter 2010 to third-quarter 2011.
At $224,300, the Raleigh-Cary metro had the highest median sales price among the 10 markets on this list and was the only market with a median sales price above the U.S. median. Nonetheless, its affordability rate stayed above the national level, with 73.6 percent of its homes affordable to households earning the area's median income, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
Total population (2010): 623,061 Median sales price (Q3 2011): $120,900 % ch. median sales price (Q3 2010-Q3 2011): 5.5% Sales volume (# units sold Nov. 2010-Oct. 2011): 9,002 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -10.8% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 69 people Unemployment rate (Nov. 2011): 7.1% Foreclosure activity rate (Nov. 2011): 1 in 958 units Walk Score: 41
Like Raleigh-Cary and other markets on this list, home prices in the Wichita metro area weathered the housing downturn comparatively unscathed.
"Inventory has been up and sales have slowed, but values have been relatively unaffected," said Mike Grbic, associate broker and owner of Mike Grbic Real Estate Experts -- Select Homes in Wichita.
The Wichita metro's median sales price rose 5.5 percent from third-quarter 2010 to third-quarter 2011, to $120,900. For 2011 as a whole, the city of Wichita posted one of the top 10 year-over-year median sales price hikes nationwide, up 17.2 percent, according to a chart provided for this report by Onboard Informatics.
Total population (2010): 1,054,323 Median sales price (Q3 2011): $123,400 % ch. median sales price (Q3 2010-Q3 2011): 1.4% Sales volume (# units sold Nov. 2010-Oct. 2011): 11,240 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -18.6% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 94 people Unemployment rate (Nov. 2011): 6.9% Foreclosure activity rate (Nov. 2011): 1 in 4,001 units Walk Score: 63
The Rochester metro area had a 6.9 percent jobless rate in November, compared to an 8.2 percent rate nationwide. The area has seen employment grow 2.8 percent since its fourth-quarter 2009 trough, while employment in the nation as a whole has risen 1.3 percent during that time.
The metro has one of the top 20 fastest job growth rates nationwide, according to Brookings.
Of 100 major metro areas, Rochester is one of only 22 to have regained more than half of the jobs lost between its pre-recession high and post-recession low, the think tank said.
While Rochester has long been associated with the Eastman Kodak Co., the area's economic performance no longer depends on the declining fortunes of that company.
Total population (2010): 569,633 Median sales price (Q3 2011): $157,900 % ch. median sales price (Q3 2010-Q3 2011): 0.8% Sales volume (# units sold Nov. 2010-Oct. 2011): 7,448 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -25.4% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 76 people Unemployment rate (Nov. 2011): 5.3% Foreclosure activity rate (Nov. 2011): 1 in 863 units Walk Score: 48
The Des Moines-West Des Moines metro area had a 5.3 percent unemployment rate in November -- among the lowest rates in the country. Moody's predicts the area will see a further 2 percent jump in jobs from third-quarter 2011 to third-quarter 2012.
"Strong Midwestern values, a highly educated and productive workforce, and the culmination of many years of cooperation between civic, corporate and government make the greater Des Moines area an attractive city to call home (and an) oasis of prosperity," said Brian Wentz, an agent at Burnett Realty in Clive, a suburb of Des Moines.
"That has attracted and retained top employers and led to many years of sustained growth, with no end in sight."
Total population (2010): 528,143 Median sales price (Q3 2011): $128,700 % ch. median sales price (Q3 2010-Q3 2011): 7.3% Sales volume (# units sold Nov. 2010-Oct. 2011): 6,109 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -18% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 86 people Unemployment rate (Nov. 2011): 7.5% Foreclosure activity rate (Nov. 2011): 1 in 973 units Walk Score: 37
Located between Nashville, Tenn., and Atlanta, the Chattanooga metro area enjoys a low unemployment rate, high affordability, and the highest rate of out-of-state in-migration among the 10 markets.
The area's median sales price rose 7.3 percent in the year through third-quarter 2011, to $128,700. The vast majority of homes in the area, 81.3 percent, were affordable to median-income households during that quarter.
"One of Chattanooga's largest resident communities, (which) historically had enjoyed 3 to 3.7 percent on an average differential between list and sales price ... increased (to a) 4 to 4.9 percent differential from 2010 to 2011," said Linda Brock, an affiliate broker at Prudential RealtyCenter.com in Chattanooga.