The journey of buying and selling property in the luxury real estate market is full of excitement and promise, giving you plenty of opportunities to start a new chapter, make new professional relationships, and expand your network. However, it can also be extremely stressful at times. This latter possibility becomes even more likely if you’re juggling the purchase and sale of two homes simultaneously.
If you are planning to buy and sell gorgeous brownstones in Brooklyn, such as brownstone real estate in Park Slope
, you have so much to look forward to. Navigating this process can be quite straightforward as long as you know what to do. That’s why we’ve put together the following guide to buying and selling properties at the same time. Let’s dive in!
Stay up to date on your local housing market
The first step to successfully buying and selling simultaneously is to get as much information as possible about where the market is heading in your neighborhood. With up-to-date market data and property value trends in hand, you’ll put yourself in an ideal position to negotiate for a purchase price that fits your budget while fielding reasonable offers on your current property.
Meet with a local real estate agent and a qualified real estate attorney to collect all the relevant data points and to review your goals. For instance, your agent will help you narrow down your timeline and determine the speed with which you hope to reach a sale on your current residence. Your agent will also evaluate market trends and assess the pricing patterns for comparable homes in your neighborhood. In addition, they will evaluate the condition of your property relative to others in your district and determine whether it’s advisable to invest in home improvement projects before listing.
It’s essential to assess your current financial health and how likely it is that you’ll have funding available for a down payment on a new home before the sale closes. You will need to look into lending options if your home equity isn’t sufficient to cover the cost of a down payment on the new property.
Research your financial options
Managing the purchase and sale of a Brooklyn brownstone at the same time may be the ultimate multi-tasking endeavor. That said, you can make the process go much more smoothly if you’re aware of all the different ways you can bridge the gap (financially and time-wise) between the sale of your current house and the purchase of your next one.
Of course, the most straightforward option would be to rely on your own savings to cover the cost of a down payment if it looks like you’re going to close on a purchase before selling your current home. If that’s not an option, there are plenty of other avenues you could take. First, check if you can open a home equity line of credit (HELOC) on your current residence. Make sure you do this before listing your house on the market because most lenders won’t approve it otherwise.
A bridge loan is another way that Park Slope real estate homeowners choose to fund the move from one house to the next. This strategy allows you to borrow as much as 80% of the value of your current house to pay off your mortgage and use the remainder as a down payment. Most bridge loans’ terms are one year, and you’ll have to make interest-only payments that are slightly higher than you’d expect on a conventional mortgage.
Buying first vs. selling first: the pros and cons
Next, you should spend time with your real estate team to weigh the benefits and drawbacks of buying your new home first or waiting until the sale of your current home is complete. Every homeowner’s position will be unique. Here is a quick breakdown of what you can expect from both options.
If you’ve found your dream Park Slope brownstone property and already have all your finances in order, it might be necessary to make a down payment before selling your current home. Ensure that your credit is outstanding, and meet with your lender to get full preapproval for a mortgage before you make an offer.
Buying first also comes with the advantage of clearing up any anxieties about the move to a new home. Since you will already have a new home lined up, you won’t have to worry about moving into a temporary space.
However, you may be responsible for two mortgages for a period before you sell your home. Ensure that you have adequate savings to cover payments if any delays in the sale pop up. Another option is to include a sales contingency in your home offer that allows you to back out of the contract if your home doesn’t sell by a specified date.
Waiting to close the deal on a new home is usually the safer plan of action to take if you have questions about your financial situation and may not be able to cover the cost of a down payment and two mortgages independently. Plus, you’ll be able to negotiate for the purchase of your new home from a stronger position without the mortgage from your previous home weighing you down. On the other hand, you’ll likely have to pay for temporary housing for a few months if your home sells long before you buy your next property.
One option is to draw out the selling process on your current house until you can find a new residence. Work with your agent to develop a strategy to extend your closing period. You can also frequently find room to put a rent-back clause in your sales contract if you have an eager buyer who’s willing to give you some extra time to find a new home.
Get in touch with a local real estate agent today
If you have any questions about getting started in Park Slope real estate, reach out to the expert agents of the Ivey North
team today! From Park Slope to Bedford-Stuyvesant brownstone apartments
, this exceptional team is ready to guide you toward all your goals.*Header photo courtesy of Shutterstock