Buy & Sell Simplified
Understanding How to Buy a Home when you need to Sell
Strategies for Sequential Homebuying
For homebuyers looking to buy a house before selling their current one, several strategies can be considered:.
This is a common strategy where the purchase of the new home depends on the sale of the current home. Although it provides security against owning two homes at once, it may make offers less attractive in competitive markets due to the added uncertainty for sellers. However, there are strategies that can offset a contingent on the sale of your current home such as a second earnest money deposit when your current home goes under contract, releasing the contingent sale when the buyer of your current home has clear to close, finding out other terms that are important to the seller such as having extra time in the home to move out, having very tight terms on other contingencies such as Due Diligence, Appraisal & Financing. Ask me more about how I've been successful with home sale contingencies!
These are short-term loans that leverage the equity in your current home, providing funds needed for the purchase of a new home. This can be particularly useful in bridging the gap between buying a new home and selling the old one, though it often comes with higher interest rates and fees. Ask me for a referral to one of my preferred lenders to learn m more about how a bridge loans could work for you!
This method involves borrowing against the equity of your current home to fund the down payment or other costs associated with purchasing a new home. It allows flexibility but also requires that you manage additional debt responsibly.
If you move into your new home, you could rent out your old property to qualify for a new home loan. This can be a viable option to manage finances without having to sell your current home immediately.
Programs like Homewards, "Buy Before You Sell provide solutions such as a guarantee to purchase your current home and allowing you to pay Cash to purchase your next home before you sell your current home. These cash offer allow you to make non-contingent offers on your next home before you even put your current home on the market! More info can be found at www.homeward.com.
Many new home builders will allow for a contingent on the sale of your current home for an extended period of time. This will vary by builder, but it is a good way to allow time to build and time to make some upgrades/improvements on your current home.
Each of these options has its pros and cons, and the right choice depends largely on individual circumstances, market conditions, and personal financial health. It’s crucial for sellers and buyers to consult with a knowledgeable real estate agent to navigate these options effectively.
