When a person sells a home, they must find another. These transactions will occur in a market that is better for either buyers or sellers…but not both. The seller becomes the buyer, and they are only benefited by the market in one position. This is why many people end up renting for a short time while they wait for the market to change. They sell in a seller’s market and buy in a buyer’s.

In addition to the markets, it is difficult to make an offer on a new home when your old home is still in escrow. While waiting for your home to close, you will not have that money available for a down payment. If you find your next home before you even have an offer on your old house, you may have to give it up. This just complicates the search. Thankfully, there are contingent offers that sellers may accept while you are waiting for your previous home to sell.

What is a seller’s market?

If there are more buyers than homes in the market, it is a seller’s market. Cash offers may win out over mortgages with more closing costs, and buyers must be ready to offer as soon as they find a home they desire. Sellers, on the other hand, will sell their homes quickly while having more difficulty buying. One solution for this problem (which is sort of a good problem) is to ask to do a rent-back, where the seller rents their previous home after it is sold while buying his or her next house. You can also request an extended closing. Loans may be taken out against your home’s equity to avoid delays in purchasing your next home.

What is a buyer’s market?

In a buyer’s market, there are many homes available. Because there are more homes than buyers, the buyers get the power to wheel and deal a bit. This is when contingency offers are more likely to be accepted. Homeowners are more likely to accept less-than-perfect offers to do what it take to get the home sold.

It is easy to see why it is difficult to be a buyer and a seller at the same time. The markets simple don’t support both at the same time. If you end up renting in order to find a better market, you can end up spending a lot more money in rent and storage, but sometimes it is the best option.

The best thing to do when you are buying and selling at the same time is to be organized and educated. Know the options that are available, and don’t rush into decisions that you are not comfortable with.