Summary: The housing market in Idaho is very hot right now, with inventory very tight…
Should I sell my current home first? Or, should I buy, then sell?
Homeowners have been asking these questions for as long as there have been homes. As with many issues, there are several sides to the question. Here are some for you to consider.
The Argument For Selling First
If you put your home on the market before finding the new one, you’ll know exactly how much cash you have available to invest. You will also be able to move quickly when you find the right home to buy.
You will also be able to use the proceeds of your home sale to be put towards the down payment of your new home purchase. In many cases, buyers may not be able to complete a sale without these proceeds.
The Argument For Buying First…Then Selling
On the other hand, the family who buys your home may want to move in immediately. What do you do then? Become a motel dweller? It can be pretty stressful to have sold your home, but have not yet found a new home. And even if you do, there could be a big gap between the closing date of your home sale and that of your new home purchase, leaving you scrambling to figure out where you will stay in the meantime.
If that’s a concern for you, you could also look for the “perfect” house to buy, make your offer, and only then sell the old house.
But this approach has its problems as well. If you have to sell your old home to be able to buy the new one, you would make a “contingent offer.” This means that you tell the seller, “I’ll buy your home if I can sell mine.” It is widely regarded as a weak offer, and many sellers won’t consider such a proposition.
Otherwise, you could leave that contingency out of the offer and simply make the best attempt to ensure that the two closing dates coincide as much as possible.
How to Stay After the Sale
You may consider a “sale with rent-back.” This means that the person buying your home agrees to allow you to stay for some time after escrow closes. You would typically pay them rent in the amount of their mortgage payment. This would give you time to find your new home, negotiate the purchase and close escrow. You would negotiate the length of time they’d allow you to rent back as part of the sales agreement.
If you are one of those fortunate people with a large sum of cash in the bank, you may decide to make your offer on the new home without having a buyer for the old one. This approach can work very well—but keep in mind that you will have to qualify for your new loan while you still have the obligation to pay the old one.
If you have enough income to qualify for both loans AND you are willing to bear the expense of two homes for some period, this can be a very powerful approach.
Get professional input
If you’re still not sure what suits you, you’re at least equipped with the knowledge to ask the right questions. Now you can contact a professional loan officer to get feedback on what you are capable of and what would work best for you.
Ready to Apply For a Mortgage in WA, OR, CO, or ID?
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.