Buying a home is an exciting prospect. But, what do you do when you already own one and want to move? With rising home prices, it can be daunting to try to purchase a new one before managing to sell your current one.
However, with some strategic planning, buying a house before selling yours is not impossible. Read on to learn how to plan ahead and prepare for the process of buying a new home while still holding onto your old one.
How to buy a house before selling yours
Most people think they need to sell their home before buying a new one. The truth is, with the right strategy, you can buy your new home first, then sell your old one – and save yourself a lot of time, money and hassle in the process. Here’s how:
Get pre-approved for a mortgage on your new home: Getting pre-approved will give you a clear idea of how much you can afford to spend on a new home. It will also show sellers that you’re a serious buyer, which could give you an edge in negotiation.
Find a real estate agent who specializes in helping buyers purchasebefore selling: A good real estate agent will be familiar with the processes and timelines involved in buying before selling. They can help you navigate any challenges that come up along the way.
Make a contingency offer on your new home: A contingency offer is an offer to purchase that’s contingent on the sale of your current home. This type of offer gives you some protection in case your current home doesn’t sell as quickly as you’d hoped.
What are the benefits of buying a house before selling yours?
When you buy a new home before selling your old one, you can take advantage of many potential benefits. First, you may be able to negotiate a better price for your new home if the seller knows you don’t have to sell your current home first. Second, you can usually avoid paying double mortgage payments and interest rates by getting a bridge loan.
This type of loan allows you to use the equity in your old home as collateral for the down payment on your new home. Third, buying a new home before selling your old one gives you more time to find the right buyer for your old home, and allows you to move at your own pace. Finally, if the market is favorable, you may be able to sell your old home for more than you paid for your new one, giving you some extra cash in the end.
How to make sure you can afford to buy a new home before selling your old one
The thought of buying a new home before selling your old one can be daunting. How do you know if you can afford it? Here are a few tips to help you decide:
1. Know your budget. Before you start looking at new homes, sit down and figure out what you can realistically afford. Make sure to factor in the costs of selling your old home, such as real estate commissions and repairs that may be needed to make it market-ready.
2. Get pre-approved for a mortgage. This will give you a clear idea of how much money you can borrow and will help speed up the process when you find the right home.
3. Have some extra cash on hand. Even if you’re pre-approved for a mortgage, there are often additional costs associated with buying a home (e.g., appraisal fees, inspections, etc.). Having some extra cash set aside will help ensure that you can cover these unexpected costs.
4. Consider short-term rental options. If you’re not ready to commit to selling your old home right away, consider renting it out until the market improves or you find your dream home. This option can give you some extra income to help offset the cost of buying a new home while giving you more time to make a decision about selling your old one.
Tips for marketing your home to sell quickly
1. Home staging is key – make sure your home is clean, decluttered, and well-lit.
2. Hire a professional photographer to take high-quality photos of your home.
3. List your home on popular real estate websites and use social media to share listings.
4. Hold an open house to give potential buyers a chance to view your home in person.
5. Offer a competitive price for your home based on recent comparable sales in the area.
Should you use a real estate agent or go it alone?
There are pros and cons to both using a real estate agent and going it alone when buying a house before selling yours. If you are considering using an agent, be sure to interview several to find one who you are comfortable working with and who has experience successfully completing transactions like the one you are attempting.
On the other hand, if you decide to go it alone, remember that you will be responsible for all aspects of the transaction, from negotiating price to managing paperwork. You may also find it difficult to find a buyer who is willing to work with your timeline for buying and selling houses.
How to negotiate the best price for your new home
If you’re thinking of buying a new home before selling your current one, there are a few things you need to know in order to get the best price possible. Here are some tips on how to negotiate the best price for your new home:
1. Get pre-approved for a mortgage. This will show sellers that you’re serious about buying and give you more bargaining power when it comes to price.
2. Make a strong offer. If you low-ball the seller, they’re unlikely to budge much on price. But if you make a strong offer close to the asking price, they may be more willing to negotiate.
3. Be prepared to walk away from the deal. If the seller isn’t budging on price, don’t be afraid to walk away from the deal. This shows them that you’re not desperate and that you’re willing to walk away if they’re not willing to meet your price point.
What are the risks of buying a new home before selling your old one?
If you’re thinking about buying a new home before selling your old one, there are a few things you should know. For starters, it’s important to be aware of the risks involved in this type of transaction. Here are some of the potential risks to keep in mind:
1. You could end up owning two homes if your old home doesn’t sell as quickly as you’d hoped. This would mean having to make two mortgage payments each month, which could be difficult to afford.
2. There’s also the risk that your old home won’t sell at all. This would leave you stuck with two properties and two mortgages.
3. If you do manage to sell your old home before buying a new one, you’ll likely have to move twice – once to get out of your old home, and again when you’re ready to move into your new one. This can be disruptive and expensive.
4. Buying a new home before selling your old one also means that you’ll need to come up with the cash for a down payment on the new property upfront. This could be a challenge if you’re tight on cash flow.