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.
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.
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?
Buy First…Then Sell
You could also look for the “perfect” house to buy, make your offer, and only then sell the old house. 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.
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.