One of the biggest concerns we hear from homeowners is how to time selling and buying a home in today’s competitive seller’s market. This has always been something we have managed closely, since most people prefer to move once. However, today’s strategy is different than it was just a few years ago.
Here are 7 strategies that have worked well for our clients:
- Buy First. If you can qualify and afford it, the best move is to find and contract to buy first, then list your home for sale. We have our clients prepare their home for sale, so that as soon as they contract on their new home, we can list their home and usually have a contract within a few days to a week.
- Find Next Home First. If you can qualify to buy first, but prefer not to make double mortgage payments, we are very skilled at timing the sale and the buy. Since finding and contracting on a home will most likely take more time than selling, we recommend finding your next home first. Prepare your home for sale, so that you are ready to list as soon as you find your next home. With the advice and help of your trusted Realtors (Blessings Realty, of course), make a competitive non-contingent offer on your next home when possible and get it accepted. Sometimes the sellers will accept a longer closing which will allow you time to sell your home. As soon as you are under contract, we will list your home for sale with the goal of closing your sale on the same day as your purchase. This allows you to move once.
- Buy New. Most production builders are building spec homes which may be ready now or in the next few months. With the demand being so high, you may need to consider building from dirt. The advantage to contracting on a new build is that you can avoid the bidding war that is happening with resale homes. The disadvantages are that you may need to wait longer than 6 months and buying new will cost more than buying resale. Make sure you seek the advice and help of your trusted Realtors, Blessings Realty. Things don’t always go smoothly with the building process and we can be there to watch out for your best interests, intervene with the builder or get you out of the contract if needed.
- Use a Bridge Loan. Another option is to get a bridge loan (yes, they are back) to allow you to purchase your new home before you sell. These loans are offered by local banks. It is short-term financing to allow you to finance your new home before you sell. Once you sell your home, you can then obtain a permanent mortgage with the down payment you will have from the proceeds of your home sale. We can recommend reliable lenders who handle bridge loans.
- Tap Into Your Equity. Many of us have gained a lot of equity in our current homes over the past several years. You may want to tap into that equity by getting a home equity line of credit (LOC) or home equity loan and use those funds to buy your next home first. Then the loan gets repaid once you sell your current home.
- Stay with Friends or Family. If you are lucky enough to have family or friends with extra space who you can tolerate living with for a short time 😉, see if they’d be willing to put you up in exchange for helping out with cooking, cleaning, childcare and/or household expenses. It could be a help for both of you during this time when so many are struggling financially. This way, you can sell your home first and then find your new place at a more relaxed pace.
- Sell and Rent. Another option is to sell your home first and find a short-term rental while you search for your next home. There are options available. Ask us if you are interested.