How To Buy a New Home While Selling Your Current House

This is the real estate catch 22.  You want to buy a new house but can’t without selling your current house.  Do you sell first but have nowhere to go?  Or do you buy first and still have to sell the one you have?  How do you line everything up perfectly so you can move from one house to the other on the same closing day?

The good news is – this is common in real estate.  And there are a few things you can do to best prepare yourself and your family. 

Many buyers purchase a home that is perfect when they buy it, but find after a few years that they have either outgrown it or it doesn’t fit their needs anymore.  You and your family decide it is time for a new house.  Where do you start?  Buying or selling a home can be one of the most stressful things you can do, and buying and selling at the same time is even more overwhelming.  You want to make sure you find the perfect new house while still getting the best offer possible for your existing house.  That plus, you need to accomplish both of those objectives simultaneously so you don’t become homeless.

This may sound intimidating, but that is why you have an experienced agent working with you.  Here are the steps you need to take to achieve your goals.

Step one:  Call your real estate agent to get started.  For those of you who want to use me as your agent, make sure to call me as soon as you begin planning so I can be involved from the start.  This helps me manage your expectations and meet your goals.  Your agent will come out to your house and get a sense of what they would be able to sell it for in the current market.  This will give you an idea of how much money you can put towards your next purchase.  We can also discuss the timeline you are thinking so we can plan accordingly with market fluctuations.

Step two: Talk to a lender.  I work with some amazing lenders in the area who are experienced and know the local market.  I am happy to recommend a lender to help you with the financial side if you need one.  They will work with you on what you need for a down payment, what the current interest rate is, and what your closing expenses will cost.  They will also discuss what your current loan status is and how much equity you will have available once we sell.  The right lender will come up with a loan plan based on your unique situation.  That will help us figure out our options as to whether you need to buy or sell first.

Some of the factors that will play a part in how we decide to move forward are:

·        What is your current home’s condition right now?  Are there projects or repairs that need to be done before we list the house.  This may affect the timeline or the value of your home.

·        What is the timeline you are hoping to achieve.  Is there any flexibility?  This is key to planning how to proceed.

·        How much equity do you have in your current home?  This will be important in determining whether we buy or sell first and what type of financing you are best getting.  Do you need to access the equity for a downpayment?

All of these factors are important to discuss in our first meeting.  It takes time to sell a house.  Preparing your home, listing it, showing it, accepting an offer and getting to closing usually averages at least 8-10 weeks.  On the other side, buying a home takes a similar amount of time to find your dream property, get an offer accepted, home inspections, loan approval and closing on the new house.  These are averages and some houses may take longer so we need to communicate throughout.

If you are planning on buying before selling, we need to discuss bridge loans or using a home equity line of credit.   We can also go over buying with sales contingencies and what that means.   There may be options for selling your home with a rent option to stay there after the sale or renting a different property if the timelines can’t line up. 

As always, there is much more information I could give you but this column is not long enough to go over everything! 😊  The most important thing I want to make sure you understand is that sometimes buying and selling at the same time can be difficult but that is why you hire a great agent to help you work through all your options.

If you have any questions, please feel free to email me at kpackardrealtor@gmail.com.