Three options for people who need to buy a home before selling.
Selling your current home before buying a new one is the conventional way to move. However, depending on your situation, there will be times when buying before you sell is the better option. Whatever your reason, you should know that buying first comes with additional risks, such as paying two mortgages, if your current home takes a long time to sell.
If you’re in a situation where you must buy first before selling, don’t worry. It is possible, but it takes some strategic planning to make it happen. Here are three things you can do to help you buy before you sell:
1. Make an offer with a home-sale contingency. By including a home-sale contingency in your offer, you can purchase the new house once your existing one sells successfully. If your current home doesn’t sell within a certain time frame, you can cancel the purchase contract without any penalties. To sweeten the deal, your agent can explain to the seller that your house will likely sell fast in the current market.
“Buying first is possible, but it takes strategy and planning. “
2. Finance with a bridge loan. A bridge loan is a short-term, high-interest loan. When you buy with a bridge loan, you can use your existing home as collateral to get a loan for your new house. To close your bridge loan faster, try to align the closing dates of your buying and selling transactions.
3. Negotiate a rent back. A rent back will let you live in your current home after you sell long enough to find your next one. I’ve seen rent backs of 30 to 60 days after closing.
Buying a new home before selling your existing one has its unique challenges, but if you can leverage the three options above and utilize the guidance of an experienced agent, you can come up with the best solutions for your situation. If you want more details about this topic or have any real estate concerns, don’t hesitate to call or email me. I’ll be happy to help.