Buying and selling a home is stressful. Doing both at the same time is possible, but you should know what you’re in for and how to coordinate everything first so that the process is more manageable. You should also know what type of market you’re dealing with.
Determining Whether to buy or Sell Your Home First
Unfortunately, there isn’t an easy answer as to what you should do first here. Regardless of your choice, you’ll be adding pressure to the other side of the equation. This is why you should start by looking at your finances, determine if you’re willing to move twice, and learn about the market conditions in both areas. In doing so you’ll probably discover you can’t afford to put a cash down payment on your new house and make two mortgage payments for an indefinite period of time.
If you sell your home before buying a new house, you must find somewhere to live for a while. This will require you to move into a month-to-month rental for a while or spend time living with friends and family members. This is why, even if you plan to sell your home before buying a new house you should still start shopping immediately. You’ll only be able to afford sitting out of the “game” for a while if you’re in a buyer’s market. Even then, you can’t afford to wait too long or things may quickly take a turn on you.
Buying a new House Before Selling Your Old One
When you sell your home but need somewhere to stay until you buy a new house you can attempt to write a “rent back” into your sales contract. If you can do this, you’ll be able to become a tenant, renting your home (paying at least the price of the monthly mortgage) until you can buy and move into a new one. Unfortunately, you’ll probably get fewer offers this way and you’ll also only have a limited time to buy a new home because nobody is going to wait forever to move into the home they purchased from you.
There is some middle ground that you may find work best for you: Making a contingency offer means you can enter into a contract for buying a new home once your current home sells. Of course, there will be an expiration date written into your contract here so you won’t be able to lollygag. If you’re in a seller’s market, most people won’t give a contract for a home with this provision written into it much serious consideration. After all, they’re already stressed when it comes to selling their home and now you want them to be stressed about you selling yours as well. If you do find someone who’s willing to buy your home with this provision you won’t have much room to negotiate anything else. As such, you should expect a low offer. Your agent can help you determine if this makes the most sense for your situation in the current market.
Whether you buy or sell your home first will more than likely depend on the market conditions in your area. In a buyer’s market you’ll have more leverage when buying your new house so you should make an offer that’s contingent on selling your “old” home. However, when you’re in a seller’s market you’re in a position to better negotiate the sale of your home. In either case, you should stop by Vitale Homes for a tour of their homes and what you’ll get to look forward to at the end of your journey here.
Picture Credit: mohamed_hassan