Sell My Home
How do I Buy my Hew home before Selling my old one?
There’s SO many benefits of buying your home before selling your existing home. Simplicity, stress reduction and, of course, a massive amount of financial benefits to doing this. You also can submit stronger offers that don’t have a Selling Contingency.
However, very few people have the cash on hand to buy a new home outright before selling your old one. That means that for the normal individual, you’ll likely need to either find a place to rent while you look for a new home or use an alternative solution, possibly considering doing a Concurrent Closing.
Here are your options:
1. A Bridge Loan
The easiest solution to all of this is by getting a short term loan referred to as a Bridge Loan. It’s expensive and even if you can qualify for a bridge loan, it’s pretty risky business, as you may not be able to sell the home before the loan is called due.
Need an Attorney?
Need an attorney to guide you through the selling & buying process? We can give you a referral to a great Attorney.
2. Home Equity Line Of Credit (HELOC)
A much safer alternative to a bridge loan is a Home Equity Line Of Credit, also known as a HELOC. This uses the equity you have in your existing home as a revolving Line Of Credit. The thought here is that you can go to the bank, apply for a HELOC, and then pull the money out to use as a down payment on the new house you’re buying.
Then just sell your old home at your own pace. Downside here is that you’ll need to make interest only payments on the HELOC on top of the payments for both of your home mortgages.
3. A Contingent Offer
Probably the best option, lowest cost, lowest risk is just to make offers with what’s called a Home Sale Contingency. When you use a Home Sale Contingency in your offer to buy someone’s home, you are agreeing to buy the home if, and only if, you can find a buyer for your existing home. So the sale is contingent on you selling your home. If you can’t find one within a certain timeframe, then you can just walk away!
If you are here, you are definitely thinking about selling, just sell to us
We’ll make the process simple for you | WE’LL BUY YOUR HOME!
The only problem is that sellers are not going to prefer your contingent offer; it lowers, significantly, how competitive your offer is considered.
A gigantic trove of iBuyers (instant buyers) have also been popping onto the scene who have given their shot at addressing this problem; this is by allowing you to sometimes even rent back the property while you attempt to find a new home! Some even offer you the ability to cash out 80-90% of your equity to purchase your new home before moving out of your existing home. The obvious downside here is that you can lose as much as 20-30% of your equity potential when selling a home to an iBuyer.
5. Pull off A Concurrent Closing
The best case scenario involves selling your existing home and buying your new home with the closing for both transactions on the same exact day. A concurrent closing, cool right?
It has a high rate of failure but if it wasn’t as risky as it is, this would be our clear cut favorite. Check out our blog, Concurrent Closing, to see how this would work.
6. Work with an Investor | The Residential Buyer (TRB)
Lastly, you can find a brutally clever real estate firm, like, perhaps, your favorite home buying company, The Residential Buyer. Depending on someone’s situation, we can address this problem in a number of different ways:
- CASH OFFER:
A cash offer isn’t the best solution for most folks but you can always find plenty of real estate investors in your area ready to buy at a discount on your home. With a cash offer, you can ask for a 3 month close to go find a new home, OR, find the new home first and then have a quick closing on your property.
Many times, we’ll even pay you more than the house is worth and do it over a series of payments with a balloon date of your choice. This type of sale, on terms, allows you to purchase a new home at your leisure because we’ll allow you to stay in your home until you find a new home. Want to know how to structure a deal on terms? Read more.
- PURCHASE OPTION:
One thing The Residential Buyer often does is purchase the right to buy your home. We lock in a price and then just give you a period of time to find your new home.
- HOUSE HUNTING PROGRAM:
Lastly, we do something we call the “House Hunting Program.” You tell us the type of home you want and where you’re looking for. We go find completely off market properties that fit what you want. Only after you take one of the homes we provide do we have the right to purchase your home.
If you have questions regarding what we do, go ahead and get those answered.
Whichever route you choose in your home transition process, is up to you, explore your options and see which one you can do to get the highest value for your home while limiting the potential risks and costs of being stuck with two homes or a blown up transaction.[activecampaign form=3]