Should you buy a home before you sell your current one? Well, that depends…
If you can afford to maintain both properties at the same time, then it’s not a huge deal to purchase before selling. It will make the move a bit less stressful – as you won’t have to be completely out of your old home before you can move into the new one – and will allow you time to make any changes to the new home before you move in. It also gives you time to make any repairs to your old home before selling it – without having to live in the middle of a work zone.
If you will be using the proceeds from your old home to purchase a new one, many sellers will want you to at least have your home listed before making an offer on their home, and if your home is already under contract, that makes your offer even more attractive. As a Seller, the most attractive offer is a cash buyer that can close exactly when you need to.
The biggest downside to waiting to sell is that you will have to make payments on two homes until the old one sells. This includes the mortgage payments, as well as utilities, taxes and insurance, and any HOA fees. Another possible issue is that in-town moves without a deadline tend to get drawn out. You may end up taking months to fully move out of the old home and fully settle into the new one because it’s so ‘convenient’ to swing by & grab a few things here and there, rather than just getting moved.
One option is to talk to your lender about a bridge loan. These loans will give you the funds to purchase the new home, and are paid off when your old home sells. If you are considering waiting to sell, this may be the answer to your question. If you don’t currently have a lender, we can give you the names of several local lenders that we have worked with.
Ultimately it comes down to finances. If you can afford to pay for both homes, there is less financial risk involved. However, most people need the profits from the old home to purchase the new one, so the decision is made by their financial situation.
To ease the stress of having to get a bridge loan or find a place to live & store your things for a few days, I very often schedule closings back to back – you sell your old home at 9, and buy your new one at 10. Then you are only ‘homeless’ for about 90 minutes. I have found that most buyers and sellers have some flexibility on their closing dates, but if you have a very firm date, I will do everything I can to schedule your closing then.
Real Estate 101 is a blog series to help you better understand the terminology and processes of buying and selling real estate. I hope that you find this series helpful, and please share this post with others who you think could benefit from it!
