The Buy/Sell Juggling Act
One of the most important things to remember is that selling your old home and buying a new one is part of a single process. Get a handle on the process and you can control it—and profit from it. Most of us operate on a linear track. We put one foot before another, we put our pants on one leg at a time, we start at the beginning and move to the end. But that’s not always the best way to operate. Let’s consider selling an existing home and buying a new one. Operating on a linear time line, we’d follow these seven steps in order:
- Fix up the old home.
- List it with an agent.
- Wait until it sells.
- Look for a new home.
- Make an offer on a new home.
- Arrange for financing.
- Purchase the new home.
Sound familiar? This is the way that most people go about handling the buy/sell process. A number of things are wrong with progressing in a linear fashion.
- House Short-If you sell your existing home first, you’ll likely need to move out before you complete the purchase of your new home. Where will you live in the interim?
- Furniture in Transit-Then there’s the matter of your worldly possessions. What do you do with your furniture if it’s in the moving van, but your new home isn’t ready yet?
- Scramble to Find a New Home-If you feel you must sell your old home before buying a new one, you’ll find yourself scrambling in the transaction. Today escrows move rapidly, often in 30 days or less. That may not allow you enough time to identify the location in which you want to live, much less the house you want to buy.
- Double Agents-In the linear timeframe world, you’ll pay two commissions whether you realize it or not. Certainly you’ll pay a commission to the agent who sold your home. And built into the price of the new home you buy will be part of a commission to another agent.
- Financing Penalty-Because you wait to make your purchase before securing financing, you won’t take advantage of “preapproval,” where a lender commits to lend you money before you buy. Pre-approval can provide additional leverage in an offer, possibly getting you a lower purchase price.
- House Trapped-What if your old house doesn’t sell? Do you just sit there waiting and waiting indefinitely? These are just a few problems you can face if you handle the buy/sell procedure in a linear fashion. Moving ponderously, step by step, may eventually accomplish what you want, but along the way you’ll gather aggravation and lose money. A better way to look at it is as if it’s a juggling act.
A juggler keeps a lot of balls in the air at the same time without dropping them. In short, the juggler doesn’t simply do one thing after another, but more or less does all things at once. You need to be a bit of a juggler when you’re involved in the buy/sell process. You need to do lots of things more or less at the same time. Just putting one foot after another won’t do. You’ve got to handle a variety of things almost simultaneously. You need to become a property juggler. Here are some of the steps you’ll need to accomplish, although not necessarily in this order: Make an offer on a new property. List your old home. Work with an agent on both buying and selling. Get pre-approved financing. Fix up your existing home. Make arrangements for furniture transfer. Survive and prosper!
Is It Possible to Do It All at Once?
Of course not. But once you get started you can work on all of it more or less simultaneously. After all, even a juggler who keeps six balls in the air doesn’t get them all up there at the same time. Successful jugglers throw each ball up one at a time, and keep them going. You’re going to do the same thing. In an orderly fashion, you’re going to get one thing started. And while that’s ”up in the air,” or you’re in process, you’re going to get started on another. Then, while you are juggling two, you’ll work on starting the third, and so on until you have all of the balls in the air at the same time. Isn’t that impossible? Not really, particularly because none of the things you’ll need to do will require constant attention. You just need to get them started and then, while you wait for them to work their way along until more attention is needed, you can work on another project. In this way, you can get all things done, more or less, simultaneously.