If you’re like most people, you’re probably concerned about selling your house before having one lined up to buy. You don’t want to sell your house first, not having somewhere to go. But, at the same time, you know you can’t buy another house, without selling the house you already own.
Ideally, you want to time the sale and closing of the house you have to sell, with the purchase of the house you’re moving to. Ideally…
But, it isn’t always easy, or even possible. You certainly can’t bank on it. So, it’ll help you to have a few tips to up the chances of timing the sale and purchase as much as possible, or at least have a plan just in case it doesn’t…
1. Negotiate time to find a home.
Probably the easiest solution is to sell your home to a buyer who’s willing to give you some nice terms in the contract.
You can negotiate in that the sale of your home is contingent upon finding and buying the home you’ll move to.
Not all buyers will be willing to agree to this, though. And you may have to budge a bit on your price or other terms of the agreement.
But, if it makes your life better, less stressful, and costs you less than any other alternative, it makes a whole lot of sense to give a little to get a little.
Note: This can be hard to pull off if your buyer is also selling their own home and need to time the sale and purchase on their end as well. There’s a whole “trickle down” you might need to be sensitive to. This approach works best if you’re selling to a first-time home buyer.
2. Get a bridge loan.
These aren’t the easiest thing to find, but you might be able to find a bank who will lend you money without selling your home, or as long as you have a viable contract on your home. It could be a bridge loan. Or it could just be that the lender feels you can carry both mortgages for a short period of time.
Of course, you can do away with all of these concerns if you have enough cash on hand, or own your other house outright. But most people aren’t in that position.
Note: Don’t look into these options once you have your house under contract and have found one you want to buy. Do this before you even start the process. Look into different lenders and the options they may have for you. You might be happily surprised.
3. Have a back-up plan.
Most people don’t have so much extra money that they can just rent a hotel room and storage for all of their furnishings while they’re in between the home they sold, and the home they’re buying to close.
But, if you have that kind of money, that’s a good option. Go on a local “vacation” for a while, and send your stuff to a storage facility.
Or, maybe you can find a short-term rental in your area. But, again, this might not be budget-friendly for everyone.
If you don’t have that kind of money, line up a place to stay with someone in your family. No, this isn’t ideal, but it can do the trick.
Note: Having any of these as your back-up plan can take the pressure off of you to just buy whatever house happens to be available and line up with your timing. It can buy you time to wait a bit for the perfect house, and take some of the pressure off when you are negotiating. If you are pressed for timing, you may be forced to pay a higher price for the house you are buying. So having a plan for where to stay “just in case” can cost you…but it could also save you in other ways. So, look at the silver lining.
First things first…
No matter what, don’t expect to just wing it and hope everything works out for the best.
Come up with your game plan beforehand.
Maybe you don’t even have to worry all that much. That depends on your local real estate market. It may just be that the house you have to sell will be easy to sell, and have such demand that you can call the shots in regard to the terms of the agreement and get time to find the perfect home. And, who knows…maybe there are plenty of houses for you to buy that are just sitting there waiting for you, and the owners would be just fine helping to time the closings with you.
And the best way to find that out, is to call your real estate agent, and work hand in hand with your agent from the get-go.
Real estate agents deal with these concerns day in and day out and can help you make the best decision and plan considering your wants, your needs, your situation, and the local market.