There is little doubt that buying a new home can be a huge undertaking, and if you are a homeowner who is planning to sell your current home during the same time frame, you are likely already feeling overwhelmed. Ideally, you don’t want to find yourself paying two mortgages. Our real estate agents understand the pressures of buying and selling simultaneously, and we strive to make the experience as simple as possible for you. To help get you in a successful frame of mind, we’ve put together some ideas for you to consider as you begin the buying and selling process.
Facts and Figures First
It’s wise to approach home buying and selling with a plan and armed with accurate information. Now is no time to be assuming when it comes to important numbers. Take your time and thoroughly research the housing market both in your current location and the area you are targeting for your next home. Knowing whether the market favors the buyer or seller in each area will help you define your strategy and set realistic goals.
Getting your home appraised by a professional before you list it gives you the advantage of knowing your home’s true value. Of course, your home might be worth more than you think, but if it appraises for less than what you have in mind, it’s better to know beforehand so that you have plenty of time to adjust your plan for selling and your budget for buying.
Before listing or making an offer is also the time to assess your budget and overall financial situation. This may seem complicated, considering the variables of changing markets and timing issues, but knowing what you are willing to accept for your home will ultimately affect what you are going to invest when you buy.
Explore Available Options
While timing is important, especially trying to bridge the gap between selling and buying or vice versa, it rarely works out perfectly. If you sell your home before buying, you won’t have to worry about a double mortgage payment, but you may have to consider interim housing options until you are able to purchase your new home. A short-term rental may be a viable solution if you haven’t found the home you want to buy before your home sells. Another option is negotiating a rent-back agreement with the buyer of your home, which would allow you 1-3 months of staying in your home until you are ready to move and simply paying the new owner rent.
In the event that you buy a new home before your current home sells, you will need to have a strategy in place to account for the cost of mortgage payments on both homes. One idea to consider is a contingency option, that makes your new home purchase dependent on the sale of your current home. This works well if you are fairly certain the home will sell quickly. Explore the idea of a bridge loan with your lending institution to offset the burden of a down payment and mortgage payments until your home sells. This type of loan is short term and typically requires that the proceeds from your home sale be used as repayment. It may be a perfect solution if the timing between buying and selling isn’t quite what you had anticipated.
Selling and buying at the same time is seldom a smooth experience, but being prepared both financially and mentally makes it much easier. Contact Columbia Real Estate today to discuss your goals, and discover why we are the experts in Columbia homes for sale!