How to Buy a New House Before Selling Your Current One
In some areas, houses are selling nearly as soon as they are put on the market. Ideally, when you are looking to buy a new house, your current home will already be sold. At the very least, it should be listed, but that is not always the case. In fact, in today’s fast paced world, it is very rare for things to work out according to plan. So, what happens when you see the house of your dreams hit the market, knowing that each day you wait leaves the door open for other potential buyers to make an offer?
Fortunately, there are ways to buy a house, even before selling yours. We have compiled a list of possible options to help you out. Just keep in mind that not every option will work in every situation and may not be ideal. But, as they say, desperate times call for desperate measures!
Buy a new house and hope for the best
Obviously the biggest issue when it comes to buying a new house before selling your current one is the financial aspect. Depending on your credit, your income, and other factors, the first challenge will be getting approved for another mortgage. If you are able to get approved, then the second challenge will be paying two mortgages at once. There is the risk that your current home takes much longer to sell than anticipated or needs major unforeseen repairs before you sell. If you do choose this path, make sure you have enough of a financial cushion for a worst case scenario.
Add a sales contingency into the contract
A sales contingency is basically a stipulation written into your contract that bases the sale on certain conditions being met. In this case, you would stipulate that your home must sell by a certain date or you have the option to back out of the sale. The big issue with this option is that many sellers are unlikely to agree to this sales contingency – especially if they have a desirable property. You would most likely have to offer over their asking price in order for a seller to consider this. Additionally, if your home hasn’t even been listed yet, it would be unlikely for it to sell as quickly as you would need.
Take out a bridge loan
A bridge loan is a loan that allows you to fund your down payment on your new home before your current home sells. When your current home does sell, you repay the loan. The issue is that these loans are usually high interest. If your home takes longer than expected to sell, you could be facing very high interest fees. You also need to have a decent credit history in order to qualify for a bridge loan. If all of that goes smoothly, you’ll want to do everything you can in order to sell your current home quickly to minimize interest fees.
Rent out your current home
This option definitely isn’t for everyone, but it can be helpful in some situations. One thing to note is that from the bank’s perspective, having a renter doesn’t automatically qualify you for a second loan. It will help you out, but is not a guarantee. At the end of the day, your renter could decide to move out, not pay on time, or any other issue. So, the bank does still view this as a risky situation. You could also rent your home as a vacation home or an Airbnb if you are in a desirable location.
Sell to a home buyer like Property Buyer Connect
We may be a little partial, but we like to think of this as one of the best options. To start off, we pay you cash for your house – cash that you can directly use for a down payment towards the purchase of your new home. Secondly, we get the process done fast. We can get you cash for your house in as quickly as a month from the day you first contact us. You don’t have to worry about showing your house to strangers or negotiating multiple offers. We give you a cash offer for your home based on its fair value. This way, you can sell your house quickly and get into your new home as quickly as possible. Give us a call today at 215-770-3122 or send us a message online today to get your cash offer.