Are you thinking about moving to La Crosse and want someone to give you the bottom line of what it's really like? In this episode of La Crosse Revealed, I’m going to give you the good, bad, and
How To Buy And Sell A House At The Same Time In La Crosse Wisconsin
Dated: March 3 2020
Do you want to buy a new house but feel stuck because you need to sell your current home first? If you’re currently facing this tricky situation, you’re not alone. Most Americans who own a home will probably find themselves in this position at some point in time. So if you need to buy a new home and sell your current property at the same time, this information will be vital to your success.
One of the most important things to remember is that careful planning is essential. Even the smallest hiccups in the process could have major consequences. If you don’t execute the timing of your closings properly, you could find yourself temporarily homeless. Buying a new house should be a positive change. Starting off by spending hundreds of dollars on temporary housing because you planned poorly will kill those happy fuzzy feelings pretty quickly.
To make sure your transition goes as smoothly as possible, I’ve created a step-by-step guide for buying a house and selling it at the same time. With the right preparation and proper timing, you’ll be settling into your dream home before you know it!
Step 1: Find Out What You Qualify For
The first question you should as yourself is, Do I really need to sell first before I buy? To find out the answer to this question, simply speak with your mortgage lender. If you don’t need to sell in order to obtain financing, then don’t. You’ll have less overall stress, and you’ll also be in a better position to make a purchase on your next home.
The person buying your house needs to obtain their own financing in order to close on your house. You won’t be able to close on your new home until they close on theirs. If there are any hiccups with their side of the transaction, your upcoming home purchase could easily be affected. With so many moving parts, there’s little room for error.
You should also think about what happens if your timing isn’t precise. What if you close on your first home but can’t get into your new home right away? You’ll then need to consider:
Moving everything out of the house before the new buyer moves in
Where you can store everything in the meantime—which may mean additional costs in storage fees
Timing your closing—will you want to sell your existing house in the morning, and close on the new one in the afternoon?
Finding temporary housing if needed
You’ll have less stress and added benefits if you don’t have to sell first before you buy. So make sure to connect with a mortgage lender so you know what you qualify for.
If you do need to sell before you buy, the following steps will make sure you’re as prepared as possible. Your planning and timing will be crucial, so pay attention!
Step 2: Prepare A Net Sheet For Your Current Home
Your realtor can help you create a net sheet on your new home sale. This will help you determine your final profit after subtracting all closing costs. Don’t just use a generic online calculator; they won’t be as accurate. Instead, work with an agent to get a realistic idea of the value of your property so you can make the best decisions. An agent will give you an honest analysis of what your house is really worth—not just what you think it’s worth. It’s important to remember that the market will always dictate the value of your home. This value cannot be changed by a real estate agent, an investor, or you. Trust the opinion of your agent, who knows the market best, and the market itself.
Having a breakdown of your net profit will give you the best idea of what you can afford before you shop. This will help you narrow down your home search and save you hours of internet browsing.
Step 3: List Your Home For Sale
Now it’s time to list your property for sale. Your listing should include an online marketing plan, which includes professional quality pictures and videos to showcase your home’s best features. Since you won’t be purchasing a new home until after you sell your current one, don’t worry about looking for a property right away. Feel free to research online to get an idea of what you want, but don’t fall in love with a house just yet. If you find a property that fits your needs but sells before you have a chance to make an offer, you’ll be needlessly disappointed.
It’s best to wait until you feel like an offer is coming in to start getting aggressive in your home search. Use your agent to cue you into the right time to start looking, usually when you have 5-7 showings per week. When you have the go-ahead, you can spend all the hours you want browsing Zillow to find your dream home.
You’ll also want to be aware of entering a house to sell contingency. This happens if you try to buy another house when your current home is not under contract. Your contract to purchase the new home will then be dependent on finding a buyer for your current one. This is not an ideal offer for a seller to accept. There will be some difficult questions they’ll ponder when decided whether to accept your offer. How long will it take you to get a buyer? What if your house is overpriced or doesn’t sell? Accepting an offer that includes a house to sell contingency would also lessen your exposure on the market. These types of offers should only be taken if it’s too good to pass up.
Let’s consider an example. Imagine that a seller receives an offer from a buyer that needs to sell their house first—but the seller doesn’t know this fact. They may verbally agree on a price of $400,000—until the buyer tells them they have to sell their current home first. The resulting house to sell contingency could change everything. With this new information, the seller could easily counter back at $415,000 because of the additional terms. They might even reject the offer completely until the buyer is under contract—which leaves them open to losing the house they want to someone who’s ready to pay.
Having a house to sell contingency can strongly affect your negotiation tactics, terms, and pricing. If you can avoid it, it’s best to have your current house under contract before purchasing a new home.
PRO TIP: Sellers can show their homes to other buyers if they accept a house to sell contingency, but the status will change on the MLS. This status change usually prompts buyers and their agents to overlook the property, and it will affect showings.
If a seller won’t accept a house to sell contingency, they usually will accept a house to close contingency. This means you already have a buyer and the contract is only contingent on financing. A seller will be far more likely to consider this situation, as it offers more security than you not having a buyer at all. With better terms to offer, you’re also more likely to get a better deal.
Step 4: Prepare For Incoming Offers
When your property is being shown 5-7 times per week, your agent should know that you’re close to receiving an offer. Your agent should then advise you to start aggressively searching for a home. Try not to stress if your timing doesn’t line up for you to make an offer; houses will always be coming on and off the market. If you miss one opportunity, a new listing will likely be around the corner. You’ll be able to find your dream home with a little bit of patience.
If you’re not getting many offers, you may need to adjust your marketing, your price, or both. A price change is often the best option, as accumulating too much market time on your listing could result in you losing some of the buzz and excitement around your property.
Step 5: Accept an Offer On Your Home
Things will start moving quickly once you get a contract for the sale of your house. Try to negotiate a longer closing date with your buyer (ideally not sooner than 60 days). This will help you accomplish two important things:
It allows you time to complete the process of buying a new home, which includes house hunting, scheduling inspections, applying for financing, and getting that financing approved. 30-40 days from a contract acceptance should be enough time to get everything done, with a good 2-3 weeks allotted for house hunting.
It gives buyers the needed time to do their diligence on your house. This includes an inspection to make sure they know exactly what they’re buying.
If you live on a property with an HOA, you’ll also need to provide all condo association documents to clear any issues and make sure the property is in good status. Once all issues are cleared, you’ll want to be in full buying mode. If something is wrong with your home, the buyer can still cancel the contract—affecting your upcoming purchase.
Step 6: Find Your New House And Get The Contract Accepted!
After your house clears its inspection, it’s time to put your new home under contract. Aim to have your home purchase under contract no sooner than 35-40 days from your anticipated closing date.
PRO TIP: If you’re selling your existing house in the morning and closing on your new home in the afternoon, make sure your title company or real estate attorney provides the lender with everything they need to make sure the transaction goes smoothly.
Here is where your timing can be crucial. If you don’t have temporary housing set up, you’ll want an exact plan with your lender to make sure your appraisal is filed and gets into underwriting immediately. Your real estate agent should be proactive in making sure the lender has all the information they need to complete the process.
You also need to make sure your buyer’s lender is doing everything they need to do on their end so your transaction doesn’t fall through. Their appraisal should be completed within the first 7-10 days after accepting the contract, and their underwriting should be submitted shortly after the appraisal is complete. With a mortgage contingency in their contract, the buyer must secure financing by a specified date (or the mortgage contingency date). That date should be no later than 35-45 days from your acceptance of the sale.
Making sure all of these details are in place ensures that your buyer’s financing will be 100% approved before the closing date. This is vital as it will allow you the necessary time to make sure you can deal with any last-minute hiccups. Your goal should be to eliminate as many “what-ifs” as possible.
Step 7: Close…And Close!
Coordination and planning are crucial when you’re buying a selling a house at the same time. While it’s not a stress-free process, having a solid strategy will help you avoid headaches and unnecessary issues. With the right team to help you along, you’ll be able to make a smooth transition.
If you’d like me to walk you through your specific situation of buying and selling at the same time, please feel free to reach out to me and I’d be happy to help!
I am a full-time real estate agent at Century 21 Affiliated. I am licenced in both WI and MN, so I do business in La Crosse County and surrounding areas. I have been in the real estate business since....
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