How to Time Your Current Home’s Sale
If you’re buying your first home, timing is not necessarily going to be an issue. After all, you will continue to live in your apartment, your parents’ home, or wherever you hang your hat until your new home is available – and then you’ll move right in. However, if you already own a home and are buying a new one, things are a little trickier. You probably need to sell your old home before you can buy a new one, but if you sell before you buy, where are you going to put all your stuff in the interim?
There has to be some way to time things so that you can move into your new house before you have to move out of your old one, without having to pay to put all of your possessions into storage. Fortunately, people do this all the time. Here are some tips for timing your home sale and home purchase.
To begin, there are basically two ways to time your sale and purchase; you can buy, then sell, or sell then buy.
1) Buying Your Next Home Before Selling Your Current Home
If you’re ready to buy but haven’t sold your old home yet, you can set up what is called a home sale contingency. Basically, this means that you have built into the contract a specific period of time to find someone to buy your old house before the purchase deal is finalized. If that period expires before you find a buyer, then you can cancel the deal or negotiate for more time.
A home sale contingency is a great deal if you can get it, but sellers may resist. Further, you may lose the home to a buyer who does not need such a clause.
A better alternative is probably to be found in a bridge loan. This is a loan you get to cover the mortgage of your existing home so you can make mortgage payments on your new home. Once you sell your old home, you use the proceeds to pay off the bridge loan.
The only other real option is to pay two mortgages until you find a buyer for your old home, but this is not always financially feasible.
2) Selling Your Existing Home Before Buying a New One
Selling your old home before you buy the new one is the much more popular and likely safer option. But this can create the problem of what to do with your stuff in the interim.
The best way to handle this is to arrange for the closing on your old home and the settlement date of your new home to be the same day, so you can move right in. Having the settlement date of the new home set a few days before closing on your old home should work out just fine, too.
If your buyer or seller won’t cooperate and you can’t get the timing right, then you can try asking your buyer for a rent-back contingency. In this scenario, your buyer owns the home, but doesn’t move in until you are ready to move out, and you pay them some rent in the meantime.
If your buyer still won’t cooperate, you may be stuck with a short-term rental or storage and crashing with friends or family for the interim, but be sure to try these other options first.
If you’re still looking for a mortgage to buy that new home, compare lenders quickly and easily with OnlineLenderSearch.com.
