How to Navigate Buying and Selling a Home at the Same Time
Buying a new home while selling your current one can feel like a juggling act. One of the most important factors in this process is understanding sale and settlement contingencies, which can impact your ability to secure a new home while ensuring your current home sells.
How Sale & Settlement Contingencies Work
If you're buying a home while selling your current one, you may include a sale and settlement contingency in your offer. This means your ability to purchase the new home is contingent upon your existing home selling and closing. While this can provide security for you as a buyer, it may make your offer less competitive in a multiple-offer situation. Sellers often prefer offers without contingencies since they add an extra layer of uncertainty to the transaction.
If your home is already under contract, you can use a settlement contingency, which means your purchase is only dependent on the successful closing of your current home. This is generally seen as a stronger position than a sale and settlement contingency, but it still carries some risk if the closing is delayed or falls through.
When to Use a Contingency
If your current home isn’t under contract yet, a sale and settlement contingency may be necessary, but it could weaken your offer, especially in a competitive market.
If you already have a buyer for your home, a settlement contingency is preferable because it’s a lower risk for the seller of the home you want to purchase.
In highly competitive markets, sellers may favor cash or non-contingent offers, so having a well-thought-out strategy is key.
How to Strengthen Your Offer
Price your current home competitively to help it sell faster.
Work with an experienced real estate agent to time both transactions effectively.
Be prepared to show proof that your home is already under contract if using a settlement contingency.
Consider negotiating flexibility in your contract, such as a rent-back agreement, to make your offer more appealing.
Final Thoughts
Sale and settlement contingencies can be a useful tool for navigating the buying and selling process, but they do require strategic planning. If you’re looking to make a move, let’s discuss the best approach for your situation to ensure a smooth transaction. Reach out today to get started!
