How to buy another house before selling yours? 

All you need to know.

The real estate market is full of uncertainties, so you have real estate agents to help you as they know more about market conditions and have updated knowledge about the housing market. A typical person may not be as expert as them when it comes to selling or buying a house. Therefore, proper guidance from a real estate agent can do wonders for you. 

Suppose you have been in a position where you don’t know what to do. Then, you may forward your questions to them. So, if you think about “how to buy another house before selling yours,”? Then, they are the ones who will assess your situation and can help whether to sell or buy first. That is a crucial step as agents can evaluate your position better. They know all about the prices and current market conditions

You cannot look for one definitive answer about buying and selling a property. There are many reasons that a person buys or sells a house. However, it is always different for every person. Therefore, assessing your situation becomes necessary and making a final decision. 
If you are ready to buy a new home before selling your current one, here are a few things to keep in mind. To begin, you must obtain pre-approval for a new mortgage. Doing so, you get the idea of your situation to afford your next house. Then, you’ll need to come up with a down payment for the new home. Once you have your financing, you can start shopping for your new home. Just make sure to account for the costs of selling.
Let us look at the pros and cons of buying or selling a house.

Pros of buying a new house before selling

First, you’ll have a place to live while your old house is on the market. That can be especially helpful if you have a family. 
Second, you can take your time to find the perfect new home without being under pressure to sell your old one quickly. 
If you can afford to buy a new home without selling your existing one first, you’ll make yourself more attractive to potential home sellers.
You can take your time finding the perfect property instead of rushing because you have a buyer. As a result, you have to take lesser stress.
By Buying a new home before selling your old one can take advantage of current market conditions. You may get a higher price for your old home and a lower mortgage rate on your new home. Furthermore, it enables you to save money over the life of your loan.

Cons of buying a new house before selling

You have to find a method to finance the new property without selling your current one. It would be advantageous if you committed to repaying your loan until you are ready to sell your home.
Buying first will require you to prepare for two mortgages.
Buying a home may be exciting but involves some steps and procedures. Therefore, it is both exciting and tiring. Meanwhile, when you search for your dream home, you have to struggle to find the right offer.
Like when you sell your home, you have reasons; the same is true with buying a home. Maybe your family has expanded, you want to move to a new area, or you like some other neighborhood. 
However, the situation is different for each individual. Sometimes, people don’t have enough to purchase without selling their homes first. For them, selling their old home and buying a new one is necessary. But, if one can afford to buy first, it is better to buy first. 

For many homeowners, the financial burden of paying two mortgages makes traditional buying and selling out of the question. With the price of a home increasing in nearly every major city worldwide, this presents a challenging situation for many of today’s homebuyers. As a result, you should only take this step if you are confident that you can afford two mortgages and that your house will sell quickly.

If the demand for new houses and condos is high, buying first is often the best way to invest, even if it goes against what traditional financial advisers would recommend. 
It is not advisable to buy a house first for someone with no regular income, as buying a new home without selling the prior one might be risky. Even if you consult a real estate agent, they would also ask you to sell your home first. So, purchase a house only when you have a sound financial position. Otherwise, it is not worth the effort and time.
Generally, people sell their homes and purchase a new home to eliminate all the hustles and uncertainties. If you buy first, you may not sell your house after, which could cause trouble if you need money. 
Moreover, you are not sure how long it will take if you decide to sell later. Those who sell and then think of buying a new house remove some stress from their lives. 

Benefits of buying a home before selling yours

There are some definite benefits to buying a new house before selling your current one.

Ways to buy before selling

1. Make a contingent offer.

When you make a contingency offer, you tell the seller that you will buy the house when your house sells. A person making this offer says they will buy the house once they sell theirs. However, there is no certainty that the home will sell within that period. That is why most of the sellers don’t like contingency offers. 

2. Use a bridge loan.

Yes, you can avail of bridge loans to buy your new house before selling the current one. Taking a bridge loan means putting your existing home as collateral to secure a short-term loan. 

You can use the loan to make payments on your current home and pay your down payment on a new home. The time to repay such loans ranges from 6 months to 3 years. However, there are some disadvantages to this. First of all, it has a high-interest rate. Secondly, it also has its terms and fees. So, sometimes it can be costly as you may end up paying three payments an old mortgage, a new mortgage, and the bridge loan payment. 

3. Use a home equity loan.

A home equity loan is a great way to finance the purchase of a new one. You can obtain a low-interest loan by utilizing the equity in your current home, which one can use for the down payment and closing costs on your new home. This type of loan is also tax-deductible, which can save you money on your taxes.
So, if you take a home equity loan, think about a few things. It is essential to know every term and condition of the loan. Likewise, you must assess whether you will be able to pay the monthly payments or not. You must see the uncertainty attached to using your home as collateral.

4. Make a cash offer.

If you are financially sound, you can make a cash offer. That is the easiest way to buy a house. The sellers usually take you more seriously when you buy through a cash offer. Likewise, they know there is no risk of the deal falling through due to financing issues. Additionally, closing on a cash deal is often quicker than going through the traditional mortgage process.

Conclusion

So, many people think it is the best time to buy a house when you already have sold your old one. However, this may not always be true. Sometimes, buying a new home before selling yours is even better. 
If you are willing to sell your house, you must know which options are better. That is how one can take time to find the perfect home without having to worry about finding the right buyer for the current home. On top of that, it is less stressful as you will not face any pressure. 
If you prefer a calmer and more relaxed experience, you might want to consider buying before selling. That is how you get rid of every stress related to finding a new place to live right away. Plus, you get more time to do market research and contact the right buyer or seller. 

Latest Blog Posts