How can you buy and sell a home at the same time? Today I’ll walk you through your options.
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“How do I buy and sell a home at the same time?”
This is a quandary a lot of our clients get really stressed about. However, we’ve walked hundreds of clients through this process, and so today I’ll give you some guidance on how to navigate this type of transaction.
Many people can’t afford to buy the next home until they sell their current one because all of their equity is tied up in it. This is a barrier, but not an insurmountable one. There are a couple of different ways to approach this scenario:
1. Sell first, then place a contingent offer. Typically, this is the easiest option: First, we list your home and get it under contract, then we go shopping for another home. Once you’ve located the home you want to buy, we’ll write a contingent offer on it, which means that your offer to purchase the home is contingent on the sale of your current one. That way, you won’t have to worry about losing your earnest money on the new home, especially if the deal falls apart.
Back when the market was getting tight, many sellers didn’t want to accept contingent offers. If there are multiple offers up for grabs, they’d typically choose a non-contingent offer. Today’s market, however, is more of a level playing field—if you’re willing to make a decent offer, sellers are willing to accept a contingent offer, so long as your current home is already under contract.
This option also enables you to move only once between homes. You won’t have to put your belongings into storage as you wait to purchase a home to move into.
2. Pull equity from your current home to buy the second home. If you have the ability to tap into the equity of your current home, you can actually apply for a line of credit, also known as a bridge loan, that will let you use the equity from your current home to serve as a down payment on your new home. Of course, you’d have to qualify for both mortgages, which can be a little risky, but you can contact us if you have any questions about that.
The great thing about this method is that if you have lots of children and/or pets, you can move into your new home without having to worry about scheduling showings for your old home while you still live there.
When you’re our client, we’ll take a look at your individual situation and assess what options will work best for you. If you have any questions, please feel free to reach out to us. We’re here to help!