At this point in your life, you probably know that the process of buying or selling a house can be quite stressful. But what if you’re trying to do both at once?
Even though it’s not the ideal financial scenario, selling your house while trying to buy your next home is often what makes the most sense. This way, you only have to move once to your next permanent location, rather than renting temporary apartments or moving in with family members while you find your next home.
Figuring out how to buy a house while selling your own is much easier said than done. How can you place an offer on a house if you can’t get approved for a mortgage? What if your house takes too long to sell and you lose the house of your dreams?
How to Buy a House While Selling Your Own
Buying a house while selling your own can require some fancy financial footwork. It also takes no small amount of forethought and planning. The entire process can be exacerbated by a slow real estate market or difficulty with your budget. Fortunately, there are things you can do to speed up the process, reduce stress, and smoothly transition from one home to the next.
Know the Market
First, make sure you know the market. Is it a buyer’s market or a seller’s market? Either way, you can benefit because you’re doing both. However, trying to sell your home in a buyer’s market may make things difficult.
A buyer’s market exists when there is no shortage of homes on the market, and therefore plenty of options for people looking to buy. For you, this means you have more competition out there which could lead to tons of traffic but no substantial offers. And if you do get offers, expect to be low-balled.
A seller’s market would mean fewer houses available to buyers, which will make yours a commodity as well as more valuable. However, this may also make the home you’re buying more expensive, and the bidding could get more competitive because you’ll compete with buyers who don’t have a home to sell or who are offering all cash.
Know Your Budget
When figuring out how to buy a house while selling your own, it’s important that you have a realistic idea concerning your budget. How much can you afford to spend on your next home? How much of a down payment can you make?
The answers to these questions may very well depend on how you choose to go about the process, which we’ll cover below. Regardless, there’s no point in shopping around and choosing your next home if you don’t even know if you can afford it.
Hire a Realtor
One of your options that can help expedite the process is hiring an experienced realtor. A professional who has market knowledge and expertise can help you streamline the process and save you money. They’ll have valuable insight into how to buy a house while selling your own, including which routes to take and options to explore.
Prep Your Home to Sell Quickly
Regardless of how you choose to go about the entire process, one thing is certain – your home needs to be ready for the market. While we could write dozens of articles pertaining to this aspect alone, here’s a brief set of steps for how to get your home market-ready:
- Declutter all living areas
- Make any necessary updates, repairs, renovations
- Clean from top to bottom (like you mean it)
- Consider hiring a professional stager, which could help sell your home significantly faster
- Add a fresh coat of paint to all the rooms, especially those with non-neutral colors
- Boost your curb appeal by cleaning up the front yard, doing some landscaping, and possibly painting the exterior
While this is certainly an expedited list, you get the idea. As soon as you know you want to move forward and sell your house, start getting to work.
Contingent Offers and Extended Closing Dates
Learning how to buy a house while selling your own may mean learning how to finagle the sales process. For example, there are completely legitimate options that allow you to do what you need, though which of these will work depends on the home seller’s preferences.
You can place a contingent offer on the house you want. Contingent offers can mean many things, but in this case, it means you’ll buy their house when you sell yours. If your house doesn’t sell, you’ll have the right to break the contract and walk away with your earnest money. However, if it’s a seller’s market and homes are going quickly, don’t be surprised if your offer gets turned down.
Alternatively, if you’re sure your house will sell in a short period of time, you can place a regular offer on your new home with an extended closing date. This offer is more attractive to the seller since they know you can’t back out if your existing home doesn’t sell. It also gives you time to get your finances in order once your house sells. However, should your home sale fall through, you could be in a bit of a pickle and possibly have to back out of the contract and lose your earnest money.
The Homeward Way
One way people go about working out how to buy a house while selling their own is to use a bridge loan. A bridge loan allows you to take out a temporary loan to place an offer on your new home before your house sells. This typically means going to the bank and getting a loan using your house as collateral.
Here at Homeward, we’ve come up with a different way of doing things. We get you pre-approved, so you can start shopping for your new dream home immediately. Once you find the home, we provide you with the funds to make an all-cash offer, which saves you money and helps you beat other bidders that are waiting for loan approvals.
Finally, and perhaps most comforting of all, if your old home doesn’t sell after being on the market for 6 months, we’ll buy it from you at a pre-agreed fair market price. That way, you’ll never be placed in the horrible position of being stuck with two mortgages.
Essentially, you’ll rent your new home from us for up to six months until you can buy it back from us at the original sale price plus a 1.9% convenience fee. The Homeward Way makes sure everybody wins with minimal risk to all parties.
Want to Buy a House While Selling Yours?
Are you ready to get into a new house? You don’t need to continue trying to figure out how to buy a house while selling your own. Homeward can provide all the answers and help streamline the process.
Start your application now to get pre-approved and we’ll start this journey together.
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