Have you recently made the decision to relocate for a job or to upsize to one of the homes for sale in San Ramon? If you own your current home, you’ll soon be needing to buy and sell property simultaneously. This is a situation faced by millions of homeowners each year, and it can be stressful if you don’t pre-plan and work with an experienced San Ramon real estate agent. Let’s take a look at some of the strategies to minimize stress and maximize the odds of success when buying and selling simultaneously.
Understand How the Market May Affect the Process
Buying and selling homes for sale in San Ramon simultaneously may look different depending on current market conditions. Right now, the San Ramon real estate market is hot with low inventory, plenty of interested buyers, and rising prices. This means you’ll likely experience fewer challenges selling your home than you will when looking for a new one.
In a competitive market, it makes sense to start looking for new homes and narrowing down several you are interested in before you list yours. The average number of days homes for sale in San Ramon stay on the market is only eight with hot homes selling in six. Your agent may even suggest waiting to list your home until you’ve made a successful offer on another. This way, you’re guaranteed to have a place to live if your house sells quickly.
Address Potential Challenges of Selling First
Since it’s likely you’ll sell your home before you find a new property to buy, you need to be aware of the challenges of selling first and how to address them. The biggest concern is the need to find a place to live while you continue your search for homes for sale in San Ramon. The last thing you want is to feel pressure to buy a house you’re unenthusiastic about just so your family will have a home.
To address this challenge, you can offer your buyer a leaseback agreement. This is where the buyer agrees to rent your home back to you for a certain period of time while you continue your home search. This is ideal in a situation where the buyer has not yet sold his or her home and doesn’t want to pay two mortgages. If this isn’t possible, you can ask your San Ramon real estate agent to connect you with rental homes in the area available on a short-term basis. Of course, if all else fails, you can bunk with friends or relatives, or move into an extended stay hotel until you find and close on a new home.
Address Potential Challenges of Buying First
Though it’s less likely you’ll find and buy a new home before you sell in the competitive San Ramon real estate market, you still need to consider the possibility and plan to deal with the inherent challenges. In the past, a common strategy was to make an offer contingent on selling your home first. This means you won’t actually have to go through with the purchase until you’re able to sell your home and access the equity. However, in the current situation where most homes are getting multiple offers, you run a high risk of losing the home to another buyer if you put this contingency in your offer.
If you decide to go ahead with the purchase without a selling contingency, you’ll have to face financing your new purchase without access to the equity of your current home. If you plan to make a 20% down payment on a median-priced San Ramon home priced at $1,677,856, you’ll need over $335,000 in addition to $50,000-$83,000 for closing costs. If you don’t have this amount of cash sitting in your bank account, consider one of the following:
- Sell assets. If you don’t want to pay interest on a short-term financing solution, you can sell land, classic cars, precious metals, or other assets you’ve acquired. Though you’ll lose out on future equity, it could be a good solution for those who have stockpiled certain assets.
- Take out a bridge loan. A bridge loan is a common solution for those who need to cover costs on a new home without the benefit of using their home equity. This is a short-term solution that comes with a relatively high interest rate. However, you can avoid paying the interest by paying off the loan in full once your home sells.
- Do a cash-out refinance. Mortgage interest rates are still relatively low, so it might make sense to take out a new mortgage on your current home for more than what you owe. A cash-out refinance will pay off your entire mortgage, then refinance your home for what it’s currently worth. You’ll get the difference in cash which you can use toward your new home.
If you buy one of the homes for sale in San Ramon first, you’ll also have to address the challenge of paying for and maintaining two households. A leaseback agreement can also make sense in this situation if the seller has not yet found a new home and wants to remain in their house and pay rent to you. Additionally, you can decide to rent your home short-term or turn it into a long-term rental for investment purposes.
Though the process of buying and selling homes for sale in San Ramon simultaneously is not without its challenges, it can still be done successfully if you work with an experienced agent and follow the above strategies. Ready to get started? Reach out to trusted agent Sarina Dhanoa for expert guidance.