Buy A New Home Before Selling My Current One?
Being in between the sale of your home while looking to buy a new home can often be stressful. If you cash in too early on your current one, you may end up wasting time renting an apartment, as well as a large volume of storage space for all your furniture and belongings. On the other side, if you take too long to sell and buy quickly, you’d have two mortgages to pay! Many sellers will not accept an offer conditional upon the sale of the buyer’s property. Here are the three options you need to consider before the final decision:
1. Splash the cash
Few people have money reserves lying around in their account or through investments. If financial comfort & wellbeing is your case, you should be relaxed enough to buy your new home before doing anything with your current one – but make sure to speak to your bank/mortgage broker about arranging a line of credit so that you can buy the new home.
Make the most out of an earned privilege so you can then focus on selling the current home. However, do make sure you have covered most of the mortgage in your current home or have already paid it all off.
2. In the balance
Moving to a larger home and don’t have enough equity in the current one? You have choices but it becomes more complicated. In this case, the bank will often use the other investments or a second property to help the purchase of a new home.
If the new home you want to buy has a closing date of two to four months, it can give you time to sell your current home – and you can buy the new one! Just make sure your property is in an attractive location, well maintained and at a good price range, with a professional realtor helping you sell.
The value of the your property must be relative to what we mentioned above. If that’s not the case, you may have to reduce the price or just rent the house out.
3. Receive the cash
Want little stress from the new house hunt while avoiding owning two places at once? Sell your current home, and then start focusing on the new one.
The advantage here is that you have a better idea of your budget, you have weight off your shoulders, and it could give you negotiating power while buying the new home. If you can’t agree the closing date with the seller, get a short term rental and store your furniture for a short while (as mentioned in the opening paragraph). This may be the best option rather than compromise on all aspects of your future home.
There is also the rare case that you’ve already had a particular home in mind that you’ve been waiting for, and want to make an offer on it right away.
Finally, these are all good options to consider, but always make sure to get advice from a broker, realtor or bank. They are big life decisions and you don’t want to make the wrong one! Happy buying and selling 🙂