Are you considering buying a new house while selling your old one? It’s not an easy task, but it can be done if you’re prepared for the challenges ahead. In this blog post, we’ll outline some of the things you need to consider when buying and selling a house at the same time. We’ll also provide advice on how to make the process as smooth as possible. So if you’re ready to take on this challenge, keep reading!

Which Do I Do First? Buy or Sell?

This is the big question. Should you put an offer on your new home first, and then list your home? Of should you list your existing home first, accept an offer, and then start looking for you new house?

Each of these way of doing it is not perfect. You will run into roadblocks with each method. But there are ways to make it easier, and less risky.

The Problem With Buying Before You Sell

In a crazy market like this, with such low inventory, finding your next home and getting an offer accepted, before you list your home, sounds ideal. But the problem with this method is that you will have to enter the contract for your new home with a contingency to sell your old home. This means that you can get out of the contract if you can’t sell your home, without losing any of your deposit. This is a safety measure to ensure you don’t lose any money.

But right now, seller’s don’t like contingencies. The less the better. So when a seller sees your offer with the contingency to sell your old home, your offer gets thrown to the bottom of the pile. It’s just not a great strategy right now.

Why Can’t I just Buy my New Home, Close On It, And Then Sell My Old Home and Move at My Leisure.

The problem with this, is that you will have two loans at the same time. And most people could not qualify for a mortgage for the new home with two mortgages, so for most people, it does not work.

Now if you own your old home with no mortgage, or you make an insane amount of money and can qualify for two mortgage payments, it will work just fine. But I know few people that can do that.

What About Selling Your Home, Then Finding Your New Home?

Here is your nightmare scenario with this method. You put your home on the market, get a fantastic offer, with a 30 day close. You even negotiate an extra 60 days after you close to rent it back while you look for your next home. Sounds great, right?

Well, with such low inventory, what happens if you don’t find a home that you love? Are you going to buy a home that you don’t love, just because you have a deadline to move? That sounds horrible!

Of even worse, you have to move into temporary housing, like an apartment or hotel (ugh), put all your stuff in to storage, and hope that you find your dream home soon. Not a great situation to be in!

It Depends On The Market (Partly)

Mostly, the method you choose depends on the market. In a Seller’s market (way more buyers than sellers), like we have now, you should be buying your home first. If it was a buyer’s market (more sellers than buyers), you would sell first.

But like we’ve already talked about, neither one of these is a great strategy.

Modern Financing and Technology to the Rescue

In the past year or two, I’ve seen some very innovative financing products hit the market. I have some relationships with some lenders that will help you solve this problem.

These lenders will allow you to buy your next home, close on it, move into your new home, get your old home ready to sell, put your old home on the market, and close on your old home. Essentially it’s a bridge loan, using your old home’s equity, to buy your new home.

It is a great product, and it solves this problem with ease. There are some extra fees involved, but some of them are waived if you use them for your new mortgage.

If you want to learn more about this strategy, contact me and we can talk about it.