Can I Sell and Buy a Home at the Same Time? What You Need to Know

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/4RpR
               Can I Sell and Buy a Home at the Same Time?
                                 What You Need to Know     



     Back in the late 70's when I started in mortgages, it was fairly commonplace to have "domino" closings take place.  That meaning multiple buying/selling transactions, each dependent upon an earlier one, successfully take place. 
     

     One initial Closing kick-started all subsequent Closings. Like the chain reaction seen in dominoes, each took place in a close time frame, one quickly following another.  

     The Sellers at one Closing became the Buyers at the next, and so on.  This happened so frequently back then that I didn't think much of it.  It was normal.

     But the frequency with which this happened grew less and less.  It came to a grinding halt during the downturn of the late-2000's housing crisis.  

     Understandably so.  Closings, in general, were far fewer in number. Sellers became restrained in their ability (and also less willing) to tackle the financial risks associated with these tandem transactions. 

     Currently, many markets across the U.S. have improved.  Although the healing has been slower, I'm once again receiving financing questions from Chicagoland homeowners that are confident enough in their abilities to sell, or at least sell within the timelines of their purchase contract, to want to enter into these types of scenarios.  

     If that describes you, and you're thinking you would like to sell your Chicagoland home at the same time you're buying another, be aware that many things must fall into place properly for you to do this successfully.  The timing with which these things happen is important.  Again, just like in dominoes. 

     So what are these "things"?

     Below you'll find a list of critical factors that determine the success, outcome, and speed in which your transaction(s) are completed.  Those factors are:

  • Income sufficient to satisfy 2 Mortgage Payments
  • Assets to satisfy Down Payment Costs and Closing Cost requirements WITHOUT selling your current home first
  • Satisfactory Credit to accomplish new financing Approval

     

     And last, probably what is the least remembered and most overlooked criteria ....

  • Reserves.  The money retained AFTER Closing must be sufficient to cover 2+ months of BOTH Mortgage Payments, inclusive of Taxes, Insurance(s), ALL items affecting or related to owning BOTH properties (current and new home)


     
     ALL of the above factors are pre-requisites to financing Approval.  So it's important that you, as a step-up Buyer, consult with a Lender (and an Agent) before assuming you can afford two mortgages ... or enacting a sale or purchase.

     Although "contingent" offers are increasing in number once again within some housing markets, hopeful Seller/Buyer/Borrowers can't afford to assume anything in this situations.  You can't assume you can handle the risks faced within these scenarios.  Or the probability that your offer will be viewed positively by Sellers.

     I've written before regarding the importance of good communication between all parties (client and professional) involved in a real estate transaction. It takes on heightened importance with the more challenging selling/buying scenarios, such as the one talked of above.

     Simultaneous selling and buying of Chicagoland homes can be successfully accomplished.  While elements of these scenarios are different and unique, one thing is shared by all.  A hopeful Seller/Buyer/Borrower needs to get their "ducks in a row". 
     

     Obtaining a thorough, detailed analysis of your individual scenario ... including all the critical factors listed above ... well in advance of starting your selling/buying journey, is a critical step towards finding success.

     Let's talk today to initiate your best options and get the ball rolling ... 

 


 
      Hoping to Buy or Refinance a home in Chicago or elsewhere in the Chicagoland area?  Contact me!  I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt
 
 Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656
 
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
https://1609956119.secure-loancenter.com/FreeConsult.aspx
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. MaryKay Shumway 05/07/2016 04:43 AM
  2. Gabe Sanders 05/16/2016 04:00 PM
Topic:
Home Buying
Location:
Illinois Will County New Lenox
Groups:
Realtors®
Mortgages
Chicago Area Real Estate BUZZ!
Chicagoland and Northern Illinois Real Estate
Bananatude
Tags:
mortgages
chicagoland real estate
buying a chicagoland home
mortgage advice and tips
selling and buying another home at the same time
selling your chicagoland home

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Ambassador
2,880,480
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Rare for my mostly second home market, but oddly enough we've had two this year and they both worked like clockwork.

May 07, 2016 05:48 AM #8
Rainmaker
1,343,807
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Gene,
Those domino closings can get very precarious.  I was involved in one on the sale of my first home.  All turned out well, but not without some fancy foot work at the end.   Thanks for the post.

Have a great week-end.

May 07, 2016 07:07 AM #9
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene it was a balancing act before TRID when it came to buying and selling a house on the same day, but since TRID that balancing act has become more like walking a razor thin line.

May 07, 2016 08:35 AM #10
Rainmaker
1,090,950
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

This is very scary for many buyers - so many things can go wrong.  The right lender (you!) makes all the difference is shepherding the deal successfully.  

May 07, 2016 09:32 AM #11
Rainmaker
937,475
Thomas J. Nelson, Realtor e-Pro, CRS, RCS-D, Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Good info, this is coming up more often for me too the last year or so.

May 07, 2016 09:39 AM #12
Ambassador
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Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

This can be stressful, but doable. You have to have an agent who knows what they are doing and a great lender. 

May 07, 2016 10:39 AM #13
Rainmaker
3,248,409
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene

An outstanding post . . . . Thanks for sharing your insight.

Good luck and success.

Lou Ludwig

May 07, 2016 01:08 PM #14
Rainmaker
3,248,409
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene 

Congratulations on earning a gold star feature on an outstanding post.

Good luck and success.

Lou Ludwig

May 07, 2016 01:09 PM #15
Ambassador
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi = it was possible and I have done a few - buying and selling on the same day.

However, with new guidelines, I think it's very very challenging - almost close to impossible (that word is still in my dictionary....)

May 07, 2016 02:01 PM #16
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

I've only done one sell/buy in one day this year - it took the involvement of attorneys, buyer, seller, agents, mortgage contacts and more. It's possible, but tricky.

May 07, 2016 07:58 PM #17
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Excellent post and very important information about those contingent closings and what is necessary and involved.

May 07, 2016 08:18 PM #18
Rainmaker
4,432,317
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I love the post and will share it with others. Congratulations on the feature.

May 07, 2016 08:36 PM #19
Ambassador
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

I've done only a handful of back to back closings in my career. There are plenty of people who cannot afford to buy another house without selling their current one, and getting a contingent offer accepted is very difficult in our seller's market. Interestingly, I did 2 last year, and just got my 3rd one of this year accepted yesterday. One deal I am finishing up had a double contingency!

Great stuff here, Gene, as always!

Jeff

May 07, 2016 09:07 PM #20
Rainmaker
4,797,764
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Gene.  We've now entered a period where more sellers are willing to look at contingent offers, though many buyers are not willing to put their existing home on the market for fear of not finding a replacement because of the low inventory.

May 07, 2016 09:29 PM #21
Rainmaker
2,474,206
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This also reminded me of double escrows where someone got a great deal, resold it before they even closed on it thus double escrow or two sales. Good one here Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 

May 07, 2016 11:54 PM #22
Rainmaker
1,675,419
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,  Funny that you shoud mention that.  We have one like that next Friday.  A couple is closing on their home they are selling and also closing on the one they are buying.

May 08, 2016 12:19 PM #24
Rainmaker
2,276,093
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Gene. I took this topic on a couple of different times, but not a simple answer. Nice job the way you handled your post.

May 09, 2016 10:02 PM #25
Rainmaker
1,965,475
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good Morning George - I remember those days although I was not one of those who did it in the same day.  So much has changed.

May 09, 2016 10:30 PM #26
Rainmaker
3,838,732
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

Excellent advice. Today's market is full of challenges and working with a professional Realtor and lender is the key to a successful transaction!

May 10, 2016 09:56 PM #27
Rainmaker
3,219,854
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Great advice Gene and too many people do not realize all it entails to do this juggling act:), Endre

May 12, 2016 04:41 PM #28
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

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