Happy spring everyone! Eventually, most of us face this situation where we want to buy another home but already own one. If you don’t want to rent your current house and you aren’t qualified or willing to purchase a home while still owning your current one… here are 3 things you must keep in mind to avoid disappointment and costly mistakes if buying a house this spring.
- Get the idea of making an offer contingent on the sale of your house out of your head. It’s just not likely to happen if you are looking for a house priced under $500,000. The market is too competitive right now. Plus, with a contingent on the sale of your house offer the seller can accept a different offer even if they accept yours’ and give you the “boot.” Then you lose all of that money that you just paid for a home inspection and you pile on hopelessness and disappointment in the whole process. The seller can also just decide for any reason they are tired of waiting for your house to sell and call your contingency. In that case you have the agreed upon time to get an accepted offer and the inspection contingency cleared on your house. Most sellers only like to give 2-3 days for that. Most inspection contingencies are 10 days. See the problem? Instead look at option #2 and #3 below.
- See if you qualify for a bridge loan for the down payment on your next home from the equity in your current home. If you’ve saved for the down payment and can qualify to buy a house before your sell without the bridge loan then skip this step. If you do end up getting a bridge loan you can now make an offer non-contingent on the sale of your house. MUCH stronger offer! The seller can’t accept a different offer or just decide they are tired of waiting.
- Sell your house first then set out the closing date as far as you can and offer to close earlier if you find something. This is such a strong way to go about getting your next home. You will know exactly the money that you have to work with as you will have an accepted offer on your house. Plus, it’s just as strong an offer that is only subject to mortgage financing. This will be written subject to the successful closing on your house and mortgage financing. But, that really doesn’t matter as there isn’t the ability for the seller to back out and this happens all of the time successfully. We have set the closing date out as much as 6 months in order to allow for our seller to find the right home to buy. We have also had it where we set it out 4-5 months and were able to move the closing up as we found their next home quickly.
So, for the time being. Please get the idea that you will just make an offer subject to selling your house out of your head. It’s not going to work unless you are looking in the upper bracket priced homes. The last option you could consider if the above just doesn’t work for you would be to put your house up for sale first but subject to finding your next home. This can also work, it’s just not as strong of a way to sell your house.
If you’re moving this year, go here for a free home evaluation https://traviserickson.com/free-home-evaluation/. There is absolutely no cost, no pressure, and no obligation to sell your house or use me. If you are selling and feel that I’m your best option then great. But, getting an honest evaluation of your homes’ value and of the best strategy given your specific situation if worth it’s weight in gold. Just the reduced stress alone that comes with having a solid plan of action is worth the evaluation. Cheers! Travis