Buying and selling homes at the same time

Selling your current home and buying your next one all at the same time is no doubt a challenge. In a best case scenario, it can allow you to use the equity in your current home to help pay the downpayment on the next one. Preparing yourself with good market intelligence, attempting to master the timing of the transactions and being ready for any unforeseen developments are several strategies that may ease the process.

Ideally, you can time the sale of your current home and the purchase of your next one so that the transition is seamless. But that’s not always possible.

For an interim period, you may end up with one of two cases. You may find yourself buying your next home before you sell your current one. In that scenario, you may need the support of your bank — possibly in the form of a bridge loan — to cover the costs of owning two homes until you can sell your old one. In the second case, you may sell your current home before you’ve purchased a new one. In that case, you’ll need a place to live and a place to store your belongings until you buy your next home.

Three steps to increase your odds of a smooth transition

1. Before you list your current house with a realtor, try and get a firm grip on how long it will take to sell, as well as how long it will take you to find your next home under current market conditions. Good estimates will help you get the timing as close to perfect as possible. Talk to others who have recently been through the process, or better yet, realtor friends who have the most recent experience with the market.

2. Make sure your current house is clean, uncluttered and ready for a quick sale. Have contingency plans for where you’ll stay and what you’ll do with your belongings should your home sell quicker than you can buy a new one. If you have friends or family close by, get them in on the plan. If not, budget for a hotel stay, storage or sublease on an apartment as you work on closing on a new home.

3. Discuss with your mortgage broker the various scenarios that could occur, and the options you have for meeting them head on.