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Feb. 10, 2020

How to Buy a Home While Selling Your Own

How to Buy a House While Selling Your Own

Purchasing a house while selling your old one is the best path to take for many home sellers turned home buyers. In a perfect world, this transition would take place in one day. You'd simply sell your old one, then go on to closing on the new one. However, in the real world, it's not that simple, and you'll need to expect some time between selling your house and buying your new one or vice versa. 

The process is a difficult dance full of complex steps and a rhythm that is hard to get just right. If you're wondering how to buy a house while also selling your current house, extensive knowledge of the process is important, and empowering yourself with the information you need can save you a great deal of time and money.

So, you may be wondering, can I buy another house before I sell mine? The answer to that is, yes, you can, but the bigger question is whether you will want to once you understand the entire process. First, consider what you have to gain and lose by either selling before buying or buying before selling. 

Pros and Cons of Selling Before Buying

Pros - The Benefits of Selling Before Buying:

  • You won't have to risk paying for two mortgages at the same time
  • Cash will be easily accessible for a down payment for your new property
  • You will have a better idea of the equity that can be put into your new home.
  • You may not qualify to carry two mortgages, so this option can be ideal for those with less-than-stellar credit
  • You won't have the pressure to reduce your asking price to sell your home quickly
  • You will be able to let go of one home before taking on the responsibility of a new home, which can make things feel properly ordered

Cons - The Negative Aspects of Selling Before Buying:

  • Finding a temporary place to live before settling in a new home can be chaotic
  • You will probably have to deal with moving two separate times which can be exhausting
  • You may feel pressure to find a new home in a hurry
  • Paying for storage and additional moving costs for two moves can add up
  • Your investment will temporarily be out of the real estate market

Pros and Cons of Buying Before Selling

Pros: The Benefits of Buying Before Selling

  • The process of house hunting can be more relaxed and enjoyable
  • You only move one time, so you won't face expensive storage fees or doubled moving expenses
  • You are less likely to have regrets from rushing into buying a house in a hurry
  • You'll have a place to go right away before you even let go of your current house
  • You have a cushion in case something goes wrong during the process of purchasing the new home. That way, if the deal falls through, you still have your old home to stay in

Cons: The Negative Aspects of Buying Before Selling

  • If your cash is tied up in the investment in your current home, you may not have as much freedom to make a larger down payment or high offer for the new home
  • You might be pressured to accept a lower offer on your house if you are then in a rush to sell
  • You may end up paying for two residences at once until you sell your home
  • You will also be responsible for two sets of taxes
  • If you decide to rent out your current home until it sells, you may face many challenges that come with being a landlord. They may be more complex given the fact that you are trying to show and sell the home with a tenant
  • You may not qualify for a new mortgage when you have your existing one

The Steps of Selling First

When you are trying to navigate how to buy a house contingent on selling yours, you may decide that selling first makes the most sense for your special circumstances. If so, take these steps to sell first:

  • To sell your house before buying a new one, first contact a real estate agent about listing your home for sale. Then, once you have a concrete offer from a hopeful buyer, it's okay to start looking for your new home. That can help the process go smoothly and not leave too much time between the selling and buying.
  • Decide on where you'll live before you find a new home. Life happens, and some sellers find that they can't find the right home for them for weeks or months. It sometimes takes even longer than they. Be sure that you will have a steady, secure place to live from the moment you sell your home until you are moving into your new one.
  • Fulfill all your obligations as a seller, once you know that you will have a secure place to stay until you find your dream home.

The Steps of Buying First

Sometimes buying first is just the best way to go. If you want to know how to buy a house before selling your current house, follow these steps:

  • Start house hunting right away. Be proactive since you do still want to get the ball moving on selling, yet it's important to find just the right home for you.
  • Make an offer on your dream home and request an extended closing. In this situation, you can request an extended closing if you feel that you are close to selling your home. That will give you time to better coordinate the sell of your old home while you purchase the new one. Please note that this only applies to a situation when you are close to selling your old home while buying the new one. If you decide not to list the home for sale until you have a new one, the next step would be to contact the real estate agent to list your home for sale.
  • If you have savings, you may use that to purchase the home. Alternately, consider purchasing the house with a home equity line of credit. That can allow you to borrow against the equity in your current house until it sells. That way, your available cash isn't tied up in the old home.
  • Close on the new home.
  • Consider renting your old home until it sells. That can prevent you from paying excessive costs.
Feb. 9, 2020

New Construction

You definitely need to visit new construction with your own real estate agent. The sales reps in the sales office work for the builder and have their best interests in mind, not yours. Registering with an agent on your first visit will allow them to represent you, help negotiate the sales price and work 
to get you additional incentives. You need someone on your side keeping   tabs on the details of the contract and to make sure you are getting everything promised. They can usually also negotiate “perks” such as an amount for you to use in the design center for upgrades and have the builder pay off the solar, etc. The models have hundreds of thousands in upgrades and most are not even offered by the builder, such as backyard landscaping, pool, millwork, etc. 
All the things you see are th
ere to make you fall in love with the house and many of which are not included or even offered. It is vital that an agent is there to make sure you get what is really important to you and you are delivered thehome of your dreams after the build is complete. One false rumor is that if you buy without an agent, you will get a better price as there is no commission paid. That is not true as the builder already expects to pay a commission and the price of the home is the most important thing to them, not the commission as many believe. And remember, as a buyer, the seller/builder always pays the commission so this is FREE representation for you!

One example of how I was able to help out my new home buyer clients: We toured themodels and once they chose a home and a lot, the sales rep told us the price and it included a solar lease. After I negotiated the deal with the builder, I was able to get my buyers $20K to spend in the design center and also had the builder pay the solar off so there was no lease.

I also have a BA in interior design and architecture so I can come to the design center appts to help make the best decisions for your style and resale value. I will also be a set of extra eyes during the walkthroughs and know what to look for. I have worked in new home construction and learned A LOT about how it all works and that the builder is NOT on your side during the negotiations.

If you are interested in new construction, check out these communities below and it is VITAL that I accompany you to the very first visit so I can represent you during the transaction.

 

July 31, 2017

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Posted in Market Updates