In this article
- Whether to Buy a House or Sell First?
- Buying Before Selling
- Selling Before Buying a House
- 6 Steps to Selling Your Current Home and Buying a New One at the Same Time
- Step 1: Research the Local Real Estate Market for Your Current and New Home
- Step 2: Determine Whether it is The Right Time to Move
- Step 3: Prepare the House for Showings
- Step 4: List the Property With a Local Real Estate Property
- Step 5: Save Up for a Down Payment
- Bridge Loan
- Step 6: Start Looking For Your New Home
- The Takeaway
In and of itself, selling or buying a house can be a long and hectic process. However, nothing beats the stress of buying a new home while you are still trying to sell your current home. If you are planning a move, whether it is due to a new job, the need to move to a bigger home, or wanting to move to a better school district, you will most likely find yourself in this particular situation. Ensuring that everything goes well on both sides is not easy.See How Easy it is to Get Your Custom Rate!
Fortunately, we have provided a brief guide to help you simplify the purchasing process, minimize stress, and ensure a more pleasant experience. But before getting into what you need to do, here are some crucial factors that you first need to consider.
Whether to Buy a House or Sell First?
When it comes to deciding whether you should sell or buy a house first, there are a number of things you will need to put into serious consideration to make the right decision. Some people suggest that if the house you are selling has a mortgage, it is better to sell it first to avoid being on the hook for two mortgages at once. Others advise that you wait to sell until you’ve bought your new home to avoid the stress of being in between homes.
Buying Before Selling
Perhaps the main benefit of choosing to purchase a house first before selling your current one is that you will still have a home after selling your current one. Trying to find an appropriate short-term rental can be quite difficult and stressful, especially when you have kids, pets, and heavy furniture. And since a lot of places do not allow month-to-month rentals for new tenants, you may have to pay multiple months of rent even if you need the place for just one month.
Another benefit of having a new home on standby when you sell is that you won’t have to deal with the moving process and expenses twice.
The biggest problem with choosing to buy your new home before buying your next one is being stuck with two mortgages at the same time. If you choose to go this route, you will need to make proper arrangements to ensure that you can afford both mortgages, or come up with a plan for selling the house fast. However, if this doesn’t pan out as expected, you can find yourself with a hefty financial burden.
Selling Before Buying a House
Selling your current home before purchasing a new one helps you avoid a situation where you are stuck paying two mortgages at the same time. This way, you won’t have to rush into making a decision. If you manage to find a good place to stay after selling, you can take your time and ensure that the purchasing decision you make is the right one.
The problem with selling your current house before purchasing a new one is that you aren’t guaranteed that you will find an ideal property that suits your budget and lifestyle. In the process of selling their house, some potential sellers have realized that they are better off just staying put and having the property remodeled to their liking.
6 Steps to Selling Your Current Home and Buying a New One at the Same Time
These steps apply whether you choose to buy your new home or sell your current home first:
Step 1: Research the Local Real Estate Market for Your Current and New Home
Ideally, you’d want to sell a house in a seller’s market and purchase a home in a buyer’s market. This way, you are able to sell your current home for the highest price and buy your new one for the lowest price.
However, as it turns out, there are plenty of factors that influence the housing market. You may even find different cities with hyperlocal housing markets.
In most cases, an area with a substantially high crime rate will be a buyer’s market while an area with good schools will be a seller’s market.
Step 2: Determine Whether it is The Right Time to Move
You will find that some seasons are more ideal for buyers than others. If you are looking to put your house on the market, you should consider doing so during late spring and summer since this is usually the perfect time for families who want to move but don’t want to do so during the school year. Winter is never a great time for sellers, especially for those in areas experiencing heavy rainfall. Consider talking to your real estate agent to find out whether there are other factors you should consider.
However, even if it is not the right time to sell, it is always a good idea to get it ready to sell. The sooner you prepare it for sale, the easier it will be for you when you finally decide to sell it.
Step 3: Prepare the House for Showings
When selling a home, you need to ensure that it is as attractive and appealing to potential buyers as possible. So, before putting your house on the market, take the time to declutter and get rid of anything that you don’t plan on taking with you to your new home. Preparing your home for showings is a crucial step of the selling process that should be taken very seriously.
In case you are not sure about whether you should get rid of a particular item, you just have to simply ask yourself whether you really want to move the item into your new home. If your answer is no, you can consider setting up a yard sale. This will allow you to get rid of the things that you don’t want while making money in the process.
If you choose to repaint the house, avoid bright colors and choose neutral colors. Also, go around the property checking and fixing any big holes that you may find.
This is also the perfect time to ensure that your finances are in order. Get pre-approval from a mortgage lender to help you act fast once you find your right home.
It is also important that you establish how much you can afford to pay for your new home, especially if you are eyeing a more expensive property. If you are moving to a bigger home, you need to think about additional furniture. But make sure not to overspend on your credit card when financing this purchase. Also, make sure to keep your debt-to-income ratio (DTI) in order.
Step 4: List the Property With a Local Real Estate Property
Working with a professional real estate agent gives you access to an expert who can address all of your questions and concerns and help you through the process. To begin with, a real estate agent can help arrange home staging and also help you in deciding the best decisions to make. They can connect you with a professional photographer and staging professional to ensure that your home is looking its best.
They are also responsible for listing the open house, finding buyers, and showing the home when you are not available. They can also connect with other agents to market your property.
An agent who has in-depth knowledge of the neighborhood and local market will be able to help you set an appropriate price. This will be helpful in ensuring that you sell your home much faster.
What’s more, if you sell the home before you can find another or if your new home is still being prepared for occupation, they can help you find temporary housing.
If you are unable to quickly sell your current home but still want to move, a real estate agent may be able to help you find a long-term tenant, helping you to cover some of the costs of your first mortgage.
Step 5: Save Up for a Down Payment
There aren’t many homeowners who can afford to purchase a home without having to first sell their current home. If you purchase a home before selling your current one, you might struggle to come up with the downpayment. So, before commencing the financing process, you need to understand your financing options.See How Easy it is to Get Your Custom Rate!
One way to get cash to finance the purchase is through a home equity line of credit. This type of loan utilizes the value of your home as collateral for the loan. By taking out a HELOC loan, you can use the funds as a down payment on your next home. This way, you can repay the loan using the proceeds from the sale of the home. Unfortunately, we don’t currently provide HELOCs.
As the name suggests, a bridge loan is a type of personal loan that allows you to bridge the gap between now and when the home is sold. It is usually repaid when you close on your previous home. We don’t currently offer bridge loans.
Step 6: Start Looking For Your New Home
In case you are relocating within the same city, your real estate agent can help you to both sell your current home and buy your new one. However, in case you are moving to another area, you will have to hire a new agent. Hiring an agent is particularly important in this case as they know the place better.
It is important that you find an agent who understands your needs and one who can help you find appropriate housing in case you will need somewhere to stay in between closing on your current home and buying a new one.
Given that it can be difficult to view the homes in person when buying a home in a seller’s market, a reliable real estate agent will help you figure out the logistics.
A reliable real estate agent is one who understands the kind of home and property that you want. Perhaps you want an area with good schools for 6-year-olds or maybe a quiet neighborhood because you are working from home. Or maybe you want an area with a closeby park to take your dog.
Regardless, a good agent will put all your needs into consideration and help you find the best house and neighborhood for you.
The best way to go about buying a new home while selling your current one is to first get preapproved before commencing your search. The easiest way to get started is by getting your custom rate and closing cost quote. It takes less than 30 seconds and its FREE!See How Easy it is to Get Your Custom Rate!