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Selling your home while buying a new one can be a stressful process, especially when it comes to financing. If you’re looking to buy a home soon while getting rid of your current one, here’s what real estate experts recommend to make the transition as smooth as possible.
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Sell Before Buying To Use Your Home’s Equity as a Down Payment on Your Next House
Don’t have enough cash in the bank for your next down payment? If you’re already a homeowner, you can do what 38% of homebuyers do — sell your home first and use the proceeds to buy your new home.
One way to do this is by closing the sale and the purchase on the same day, said Nicole Rueth, SVP and producing branch manager for the Rueth Team at Fairway Independent Mortgage Corporation.
“As long as you’re closing at the same title company, this strategy is very easy,” she said. “If you work with two different title companies, all they have to do is wire the funds from one title company to the next.”
A downside to this strategy is that it can be difficult to negotiate the same closing date with your buyer and seller.
See: 32 Insider Tips for Buying and Selling a House
If You Sell Before Buying, Save Enough To Cover Temporary Storage and Housing Costs
What if you can’t buy and sell on the same day? You can still sell first, but be prepared for extra costs, said Beatrice de Jong, broker and consumer trends expert at Opendoor.
“If you’re selling your home, it will likely sell very quickly. But in most cases, finding your next home will take much longer than it has in previous years,” she said. “Make sure you have somewhere to go and a place to store all your belongings.”
With so few houses on the market, Mortgage Network’s vice president Brian Koss advises homebuyers to save enough to live in temporary housing for a year.
“That gives you some time to think about what’s going on out there in the market,” he said. “It’s not a bad idea to get liquid and make sure your house is sold, but it does make the transition a three-step process.”
Read: Common Real Estate Myths That You Need To Know
If You Buy Before Selling, Weigh Your Financing Options
Maybe temporary housing isn’t …….
