Tips for Buying and Selling Washington D.C. Real Estate

Looking for new Washington D.C. homes for sale while also trying to sell the current home you live in is a common situation. The majority of second-time home buyers will need to undergo the simultaneous selling situation, which has a number of potential pitfalls. To reduce stress, think through the possible scenarios involved in this situation so you can be prepared for whatever occurs. Here’s how.

Research the Local Housing Market

How you navigate the simultaneous selling situation is often dependent on the local market. Do some research into the Washington D.C. real estate market to see if it is a buyer or seller’s market. In a seller’s market, you have more power when listing your home, but less when you are buying. You will need to get pre-approved for a mortgage before you begin looking at Washington D.C. homes for sale and may need to offer more than what a home is listed for if there are multiple offers. However, you’ll have an easier time selling your current home and may find you get more than asking price and can reject offers that contain contingencies.

Understand Your Financial Situation

Even when everything goes right with the simultaneous selling scenario, you will still have to pay fees and cover other expenses when you buy and sell Washington D.C. real estate. If the timing doesn’t go right and you end up with two houses and two mortgages, those expenses can quickly escalate. Before you begin the process of buying and selling at the same time, it’s important to ask yourself some questions about your finances before you proceed. These include:

•         Will I be able to come up with cash for a down payment if I am not able to access the equity in my current home?
•         Will I be able to pay other expenses and fees involved in the buying process if my home does not sell first and I can’t use the equity to cover these expenses?
•         How long can I reasonably pay two mortgages before it has a drastic impact on my savings or ability to plan for the future?
•         Do I have a way to pay for temporary housing if I sell my home before finding a new place to buy and move my family into?

If your financial situation cannot support more than a couple of months of paying two mortgages or if you have no way of making a down payment without accessing the equity in your current home, you may want to wait until your current home sells before you begin looking at Washington D.C. homes for sale. If your finances are especially precarious, it might make sense to hold off on both the buying and selling process until you are in a more stable situation.

Tips on Buying a Home While Your Current Home Sells

The main challenge in this scenario is that you will need to find a way to come up with a down payment on your new home and also find a way to pay two mortgages. Here are some options.

•         Offer the seller a rent-back agreement. If the seller of your new home has not yet found a new house to buy, he or she may be interested in a rent-back agreement. This is where you lease your newly purchased home back to them for a short period of time. Not only does this give you time to sell your current home, but it also helps you cover the cost of the second mortgage.
•         Get a HELOC to cover your down payment. A home equity line of credit, also known as a HELOC, is a way to access the equity in your current house before you sell it. A HELOC is secured by the equity in your home and offers you the ability to take out a loan at a fixed interest rate. You can use this money to make a down payment and cover other expenses involved in buying Washington D.C. homes for sale.
•         Do a cash-out refinance. Take advantage of record-low interest rates to refinance your current home for more than what you owe on it. You will receive the difference in cash that you can then use to cover a down payment and other expenses on your new home purchase.

Tips on Selling Your Current Home Before You Buy a New One

Though selling your current home before you find Washington D.C. homes for sale you are interested in buying may be less stressful than having two homes and mortgages at the same time, it can still be stressful. The main challenge here is finding a place for your family to live while you continue the home search. The most common options are to rent the home back from the new owner in a rent-back agreement, secure a new home to rent short-term until you can find and buy a new house, or find friends or relatives who have extra room and would be willing to let you stay with them until you can buy.

If you’re ready to start the simultaneous buying and selling situation, it’s vital that you work with an experienced Washington D.C. real estate agent to help you navigate all the possible scenarios. Ready to take the next step? Contact one of the professional agents at the Center Circle Group for assistance.