1) Coordinating the sale of a current home with the purchase of a new home, known as a simultaneous sale and purchase, is difficult and risky unless absolutely necessary due to financial constraints. 2) The type of real estate market, whether it is a seller's market with low inventory and high demand or a buyer's market with high inventory and low demand, impacts the options and leverage homeowners have when attempting a simultaneous sale and purchase. 3) Homeowners considering a simultaneous sale and purchase should carefully evaluate their financial options such as obtaining a bridge loan or rent back agreement, contingencies they can place on purchase offers, and alternative housing arrangements if deals fall through.

1. Unless you’re in it for the thrill of battle, there is only one reason for you to
attempt a coordinated sale and purchase: You have to. You need to move and you
can’t afford both mortgages. Afterall, if you had enough money to throw down for
two mortgages each month, you wouldn’t be combing the web tirelessly for a
solution.
Many of us have been there. Like nearly everything else associated with home
ownership, the next step depends mostly on you, with a few external influences.
Before you go falling down the rabbit hole of possibilities, start here:
Buyer’s Market VS Seller’s Market
In short, a seller’s market looks like this:
● low interest rates
● plenty of qualified prospectivebuyers
● less homes for sale
In this market, the seller has a leg up. They have more people coming through their
doors, competing with one another to buy, and are able to price the home at or
above market value. This tends to occurin trendier areas.
A buyer’s market looks like this:
● lots of houses for sale
● not as many qualified prospective buyers
In that case, the seller’s must do what they can to attract the attention of the buyers,
who are knee-deep in options. Home prices lower, buyer’s perform a mating dance.
When you know your markets, you will be well-armed in your decision-making. It
will be easier for you to decide which venture to take on first. Still, it won’t be a
simple process.
Picture this:

2. You are selling in a seller’s market and buying in a buyer’s market. You are
confident you can get the house you want and equally as confident that you can sell
as quickly. You are sure, in this situation, that you will be able to coordinate
closing dates so that you have enough time to move before your house belongs to
someone else and you’re arrested for squatting.
Except the real estate market, being an accurate gauge of local and world
economics, is unstable. Suddenly, you have a person moving furniture into what
was your house and you are putting your stuff into storage, asking a friend if you
can rent their futon for a month.
Sounds uncomfortable right?
The point is, you can not predict what will happen, so you need to look at all of
your options and be honest with what you’re comfortable with.
Financial Options
Selling first
Rent-Back Agreement: You make a deal with both buyer and lender that will allow
you to stay in the property for a maximum of 60-90 days. In a seller’s market,
you’ll have an easier time convincing the starving buyer to agree. Otherwise, this is
usually achieved by lowering the selling price or paying rent to the new owner(s).
Buying first
Contract Contingency: If you are buying in a buyer’s market, you may be able to
request that the buying of your new home be contingent with the selling of your
current home. (Hint: Take a look at how long the home has been on the market.
This may give you leverage.)
Bridge Loans: Think of this as a baby loan. You need money from selling to buy,
but you need to buy first to ensure you aren’t renting that futon. This loan acts as
your down payment and must be paid back upon sale of your first home. Warning:
these loans have a deadline.
Aside from financial options, you have other ones, as well.

3. You can buy first and rent your home to someone on a short-term or monthly lease
until you find a buyer. You may have difficulty getting pre-qualified, however, if
you have a current mortgage. Setting up the rental agreement with a tenant ahead
of time might ease a lender’s worry of how you will pay two mortgages.
You can sell first. Put everything you don’tabsolutely need in storage, stage your
home, then take to a monthly rental while getting pre-qualified and searching for a
new place. If you are worried about what kind of place would sublet for only a
month, AIRBNB has a lot of listings for just this sortof thing. And they’re
furnished! You could also make a list of relatives and friends you could stay with.
Another option is a hotel that offers extended stays.
The option you choosewill be one that bestsuits you and your lifestyle, as well as
your reason for buying and selling.
● If you are a young couple who wants to start a family, or are downsizing due
to financial constraints, money matters and you can’t afford to owe too
much. You need to be creative and, most importantly, flexible.
● If you are an empty-nester who owes little to nothing on your current home,
you can buy first and focus on selling later.
● If you are relocating entirely, you want to buy in a market that favors you.
This will allow you to put your focus onto selling your current home,
possibly allowing you to make more of a profit for your move.
In the end, it all comes down to how flexible you can be and the environments you
are working in. Take stockof your supportgroup--friends and family, coworkers,
neighbors. Most importantly, be well-informed and open minded.