Selling your house to buy another?

We weren’t looking but an opportunity to buy a house next door to our good friends came up and it’s priced extremely below market value as the owners want and need out (family circumstances) anyway our friend went and spoke to his neighbor and we are looking before they have anyone come in. The house needs a TON of work but I think even if it went to the open market because of the location it would sell over asking within a few hours because of the area. Anyway, we HAVE to sell our house to pay for the next house we cannot fund 20% without the sale of our current home. Realistically, one how hard is it to align sales on homes? And 2, do you need to pay tax on the sale of your home? This is our first house we would be selling. We bought extremely under value on our home at the low of the market and right now homes on average by me are selling for a little over 100k more than we paid. Ideally we want to walk away with 100k profit. If we sold for what our neighborhood houses are going for, in relation to what we actually ow on the house, I could sell for about 30k less than what homes are going for to hit that 100k profit. Am I living in a fantasy? I know we need to contact our realtor, he’s a friend of ours and I texted him asking to give us a call after the holiday weekend but just want to see what others think?

Selling your house to buy another?

I would think that most people try to schedule the sale of one home to buy another, so it is done quite often.

Regarding capital gains taxes, if you have owned the house for at least 5 years and have lived in it as your primary residence for 2 out of the last 5 years, you can exclude up to $250K of profit for single people and $500K of profit for married couples. So, you're definitely OK with a $100K profit.

Good luck on the sale/purchase!

Selling your house to buy another?

You have to sell first (i.e., be in contract). It's not hard per se but most sellers won't entertain your offer unless you're in contract on your sale and even then, if they get another offer from someone whose purchase isn't contingent on a sale, they'll probably take that. It's just easier and less risky. But I bought and sold at the same time so it's totally possible just a stressful process. We paid over asking and lied about being in contract on our sale. We delayed the signing of our purchase (had to wait on our buyers to sign for our sale) which was risky and stressful, but luckily our lawyer and realtor handled it all very well - we got lucky though because it was during Easter and Passover and our sellers were very religious and understanding of the delay.

Re: Selling your house to buy another?

It's not straight math to get to your profit as you need to consider other fees, such as the real estate broker fee (about 4% and as the seller, you would pay out of your proceeds), closing costs, lawyer fee, transfer tax, title insurance....

Re: Selling your house to buy another?

Most sellers dont entertain offers with a contingency to sell your home. It's not easy to do. You would need to list your house ASAP and get into contract before the sellers would likely agree to it.