Dear Heather: Our current home is too small. With so many opportunities for a larger home at a reasonable price, we would like to sell our existing home and move up. How does that work? — Buying and Selling At the Same Time

Dear Buying and Selling: Being a move-up buyer can be tough in today’s market. Although deals are closing, there’s no guarantee that your new dream home will close at the same time as your old dream home. Selling and buying at the same time is a delicate dance, but it is doable. There are a few ways to pursue this plan:

1. Sell first, then buy. This is perhaps the safest plan, but it calls for multiple moves. In this scenario, you list your home and complete the transaction before purchasing another home.

When you sell your home, you put the bulk of your belongings in storage and live in a temporary rental or, if possible, enter into a rent-back deal with your home’s new owner.

The advantage of this method is that you know exactly how much you can spend on a new home, and you don’t have to worry about temporary financing. Also, without another home waiting in the wings, you’ll be less tempted to drop the price or to take the first offer that is below the asking price. The disadvantage is that it is a disruptive experience, and you could be displaced for a while if you are home-shopping for a long time.

2. Buy first, then sell. This strategy minimises disruption. You can move into your new place at your leisure and then take time to prepare your home for sale. The major disadvantage is that, depending on how fast your old home sells, you could be shouldering the burden of two mortgages for some time and in these lean times, the banks aren’t looking too favourably on two mortgages. You are also responsible for maintenance and security on the vacant home. This scenario works best if your first home is already paid off.

A variation of this plan is to buy a new home with the plan to rent out the old one for a year. This buys you some time with money coming in, but being a landlord comes with its own stresses and responsibilities. You may also need to repair or renovate the home after it has served as a rental.

3. Buy and sell simultaneously. To execute this plan, you need to prepare for all contingencies and to know that if your timing is off, you will face one of the two scenarios listed above. The trickiest bit can be timing the financial burden. One option is bridge financing. This enables you to own two homes for a short amount of time.

To do this, you need to either borrow money from family or obtain a short-term loan from a bank or other lending institution to span the time period between when you close on your new home and sell your old one. It is not easy to qualify for a conventional bridge loan, since you have to demonstrate that you have enough money to pay for both mortgages for an indefinite period of time.

Try to schedule the closing date on the sale of your old home after the closing date on the home you buy. In this way, you can stay in your present home until you move into your new home. Otherwise, you can attempt to negotiate a rent-back arrangement.

There is no right answer in choosing any of these scenarios.

Your realtor may be able to advise which is best, depending on the local market and activity in various price brackets. However, much depends on your financial stability, as well as your tolerance for risk or disruption.

Happy house hunting!

Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence.