The excitement of the idea that you will soon move to a new place puts homeowners in front of an intriguing question: should they first sell their current property and then buy the new one, of should they buy already and then proceed to selling the old property? Well, the answer doesn’t depend only on you, but also on several other factors. The current status of the real estate market, your financial power and the availability of the new residence may weight in your decision.
Consider The Market Conditions
You cannot judge in a simple way if the market in your location is one of the buyers or sellers because there are some aspects you need to think about. You should take the neighborhood, the style of your residence and in what price area is it appraised. On the other hand, you also need to research about how available is the new residence and how fit is it to your needs. To make these assessments, you must have a Realtor at your side to help you out with the required information. His experience will let you know how fast and for how much a house like your can be sold. As well, when it comes to buying, you need to settle on what you want and how easy it is to obtain it. If you wish to move in an area with high demand, buying an available residence first, could ensure your place there.
Know About Your Financial Options
The ideal case is when people already have the money to pay for their new home. But in reality, most of them do need to balance the sum with the money they receive from selling the old property. To have enough time to find a new residence and move out, you could opt for selling the house and then to try and settle for a rent with the new owners. Remember that this is not a joke, as you will have to pay them the rent for real. There are also conditions for the lenders, as they will need to set the rent-back term to 60 days, at most, to avoid the residence being considered an investment property.
Other solutions involve living with friends or family if you are permitted, for short periods until you manage to move into a new home. Or you can look for rentals, short-term, of course. Also, include in your costs a storage unit for your belongings, until you manage to find the proper house.
Probably one of the biggest disadvantage in selling your house first is that, from the lack of space to live, you might feel the need to rush into purchasing a home, this one is not being exactly what you’ve been dreaming of.
You can turn to a mortgage loan, for your present home and the future home, so you can benefit from a credit line by accessing the equity in your current home. Take the credit line out first, and then proceed to sell the house. You will be able to purchase the new home and you will pay back the credit when your former residence gets sold.
Other options may include lending money from a relative, with payment after the selling of your property. You can also find loaners that will help you make the transition, by loaning the sum you need for the new purchase. You will need a clean record with excellent credit backgrounds, together with a sufficient equity your actual property. Do check the situation with a lender and see what he can tell you.
Risk Aversion and a Plan B
In both situations, you must assess the good sides and the downsides and see what scares you most. If you sell first, you will have to face the situation of not having where to live. If you buy first, you need to be prepared to handle two mortgages. Look for answers in your financial position and the way the local real estate market seems like. But not matter what you choose, you should always have a backup plan, in case everything goes wrong. A plan like this should include a supplementary income, to cover the double mortgage, or to find in advance a place where you can live for the needed period until you find a new home to move in.