It’s not every day that someone finds themselves in a situation where they need to both sell and buy a new home basically at the same time. Relocating to a new job, needing more room for a growing family, or whatever the case may be, Flanagan State Bank is here to help with checklists, tips, and pros and cons for what you need to know for managing selling and buying a home.

Founded in 1913, Flanagan State Bank has been helping residents in central Illinois realize their financial dreams and support local communities. With a wide range of finance options and expert mortgage lenders, you’ll find the right options for your budget. Let’s dive into the details for managing this complex situation.

Get Your Finances in Order

It’s no surprise that the first thing you need to do is ensure your finances are in order. While you may have gone through this process with the purchase of your first home, it’s always good to have a refresher. Here’s what you need to do:

• Check your credit score to ensure it is at least 620
• Identify and correct any errors on your credit report
• Pay all bills on time every month
• Keep credit utilization at or below 30%-40%
• Create a separate savings account for a down payment of at least 20% of the total home value

To help keep track of your progress, start a spreadsheet or other checklist and divide up tasks so you’re not overwhelmed. While time may be of the essence, you don’t want to miss anything while getting your finances in order.

Set a Budget

Knowing how much you want to spend on a home is important as you consider how much you need to save for a down payment, or even estimate how much you can afford each month.Use the Flanagan State Bank calculator tool to help estimate your monthly payment.

Consider Funding Options

Not everyone is in a good financial position to quickly put money down on a new home a move, so knowing what options are available is best. Flanagan State Bank has a wide range of products that can help with down payment and closing costs, such as personal loans or Home Equity Loan (HELOAN).

Additionally, Flanagan State Bank has loan options to fund the purchase of your new home:

• USDA – backed by the U.S. Department of Agriculture for homeowners in underserved areas
• FHA – lower rates for buyers with less-than-average credit scores
• VA – available for veterans with up to 100% financing
• Conventional – fixed or variable rate options without restrictions of FHA or VA loans

Whatever your situation, a Flanagan State Bank loan officer can work with you to understand your needs and finances to find the right product for you.

 Evaluate the Housing Market

Depending on whether you’re moving to or out of central Illinois, you’ll need to understand the health of the housing market. With quickly changing economic conditions, you could find yourself in a seller’s market for where you want to relocate and a buyer’s market for your current home. Take a look at Flanagan State Bank’s information about the housing market in central Illinois.

A seller’s market is where there are more buyers than homes, giving the seller more leverage. A buyer’s market is where there are more homes available than buyers, making it easier for buyers to get a great deal. Depending on your situation and market conditions, there are several key considerations to keep in mind when selling and buying. Here’s a quick overview of what you should do:

We will get into more detail later, but knowing at the highest level what you should do depending on the housing market is helpful when you start your search.

Find an Expert Real Estate Agent

You might have been happy with the agent who helped you find your first home, but that doesn’t mean they have experience with dual transactions. Do some shopping around and ask specifically if they have experience with selling and buying at the same time, and if they can operate in the state you are moving to, if that applies. Not only can they alleviate some stress, but they can also provide expert guidance at every step.

Understand What to Do Based on Your Situation

This is where it gets interesting. Based on your situation, you may find yourself needing to buy first, then sell, or vice versa. Keep in mind, your experience and situation will vary, but knowing the basics will help when you connect with a real estate agent and explore finance options. Let’s take a look at both:

Buying Before Selling

• Make and offer with a sales contingency – this allows you to find a new home first before selling your current home. Sales contingency means you purchase a new home once you sell your existing home.
• Ask for an extended closing – if the seller agrees to extend the closing date past the typical 30-45 days, this allows you more time to sell your current home.
• Use savings for down payment – if you’re financially able to use your savings for a down payment, it will speed up the process
• Consider a HELOAN or Bridge Loan – use equity in your current home for down payments with a Home Equity Loan (HELOAN), or a bridge loan, which is a short-term loan for the down payment.
• Explore renting a first home – if you’re not financially in need of funds for a down payment, you can rent your current home while you are searching for a new one.

Selling before Buying

• Ask for a settlement contingency – this gives you the ability to list your house first with the contingency that you find a new home before moving to closing. This is best in a seller’s market.
• Find temporary housing – while not ideal to move multiple times, renting a home can give you more time and flexibility to really get to know the housing market where you plan on purchasing.
• Include a rent-back provision – this allows you to rent from the new buyers for a short period, and could be helpful if you are either close to making an offer or in the middle of the closing period.

Connect With a Mortgage Expert.

Now that you’ve done your research and checked finances, it’s time to connect with Flanagan State Bank to work with one of their expert loan officers. You’re in good hands with a bank that has been serving the central Illinois area since 1913.