Are you looking to sell your current home and buy a new one and are wondering the best way to do it? I’ve got some tips for you today to help you navigate the process of buying a new home and selling your current one at the same time.
Whether you plan to buy or sell first, follow these three tips:
#1 Hire an experienced realtor.
Buying and selling at the same time can be complicated and overwhelming so it is important to have an Agent that has the experience to help you price your home appropriately as well as find and negotiate the best deal on your new one.
#2 Know your financial situation.
The amount of liquid cash you have, the amount of equity in your home, and the loan amount you qualify for can all factor into deciding if you will be buying or selling first.
#3 Evaluate the current market. It is important to know if it is a Buyer’s or a Seller’s Market and plan accordingly.
In a Buyer’s Market, you’ll likely have an easier time finding your new home than you will selling your old one. In a Seller’s Market, it is likely that your current home will move more quickly than you may be able to find a new one.
If you plan on selling your current home first and don’t want to be homeless, here are some tips you may consider:
#1 Make your current home sale contingent on your finding your next home in a set period of time.
Keep the dialogue open with your buyer and agree on a set time frame that you will proceed with the sale even if you have not found your next home.
#2 Find a temporary rental to live in.
Yes, you’ll have to move twice, but sometimes closing one sale before starting another one can be the least stressful option. This will let you take the pressure off the timing and gives you the time to find a home you really love, rather than one that was simply available.
#3 Sign a rent-back option.
A rent-back option is when you have agreed with the buyers that you can stay in your house for a short time after close and rent back from the new owner. This works especially well if your buyers don’t have a buyer lined up for their home yet.
If you decide to purchase your next home prior to selling, you will want to consider the following:
#1 Make an offer with a home sale contingency.
If you sign a contingency, the sellers of the home you’re buying are still allowed to seek other offers. Now, if you’re unable to remove the contingency when a second offer comes in, you have the first right of refusal.
#2 Request an extended closing.
If you’re confident that your existing home will sell in a short period of time, you can request to extend the closing date of your new home past the standard 60 days. This will give you more time to sell your current home and put your home’s equity toward your new one.
#3 Use your savings to purchase your next home.
If you’re in the financial position to do so, the simplest route is to use your savings to pay for your new home and then get a mortgage after you sell your first home.
#4 Take out a home equity line of credit or a bridge loan.
A line of credit allows you to borrow against the equity in your current home. A bridge loan is a short-term loan offered by a bank to cover your costs of buying, just until your sales close.
Whether you decide that Buying or Selling first is right for you I hope these tips have made you more aware of your options. If you want more information, give me a call! I’m always happy to talk.
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