How to Successfully Buy a New Construction Home While Selling Your Current Home
One of the most common types of real estate transactions is a client selling an existing home and purchasing another home. Buying and selling a home at the same time can be a complicated process, but it doesn’t have to be overwhelming.
I want to review this topic in a 3-part series and go over the different scenarios in which you might sell a home and purchase another home. In this first blog, let’s review the process to purchase a new construction home.
Do Your Research.
Understand your current financial situation. Do you have the money saved for your down payment? Are you able to afford to purchase a brand new, and possibly, bigger home? What takes me to the next point…
Get pre-approved. There is no point in thinking about purchasing a home if you don’t even know much you can afford to buy and build.
Create your “Needs” list. This is a list of things that you need in your new home. How many bedrooms and bathrooms do you need? Is there a certain proximity you need to be to work and school? Do you need a garage for all your tools and luxury car? These items are usually non-negotiables.
Contact Your Listing Agent
Understand the Market in Your Neighborhood. Review the comps and see how your home stacks up to what is on the market and sold in your area.
Find Out Where You Want to Live Next. They don’t build new construction homes everywhere, so make sure you take your time to find out exactly where you want to live next.
Doing these first couple of steps with help put you in a better position when it’s time to start moving forward with a new construction home. These next few steps many times will take place at the same time and sometimes there will be a lot of moving parts.
The New Home
You and Your Agent Meet with the Builder. You may have to meet with a couple of builders or builder representatives to get an idea of what you want and what they offer.
Understand the Build Timeline. Depending on the state in which the home is currently, the build timelines can vary greatly. Most new construction builds that are from the ground up are anywhere between 8-12 months. If construction has already started, the timeline can be shorter.
Understand the Costs. With new construction, the price you see is not always the final price. You have to take into account upgrades as well as costs of items you do after you move in including landscaping, window treatments and blinds, and potentially other projects.
Listing Plan
Refer to Your Market Analysis. Your listing agent will be able to go over the market analysis for your home based on the current market.
Timing of Your Listing. Pick the timing to list your current home based on when your new construction home will be completed. If you list your home too early, you might find yourself without a place to live for a period of time.
Your Needs as a Seller. You will need to know these items going into negotiations with a potential buyer. Your bottom line amount of how much you’re willing to accept for an offer and maybe needing some occupancy after closing to give you time to pack and make your move.
To wrap up, a few other things to consider. You want to create a contingency plan just in case one of the transactions fall through. Having a backup plan with help alleviate any additional stress if something were to change at the last minute. Also, you want to make sure you stay flexible. You’re doing with a new construction build and it's best to always expect the unexpected. There are constant changes and delay with a build and many of those can be out of the hands of the builder. Whether it’s weather-related or city inspection delays, staying flexible is very important.
By following these tips, you can make the process of buying and selling a home at the same time much smoother and less stressful. good luck with your home buying and selling journey!