Answers (10)
- JoEllen Ufner - ABR,GRI,SFR, "jufner"
- Contributions:459
- Pete Cannon, "petesmortgages"
- Contributions:115
- Ana Ma, "Ana Ma"
- Contributions:13
I understand you want to purchase a step-up home, but aren't sure if you should you buy or sell first. The truth is, the answer depends on your specific set of circumstances and current market conditions.
If you have the cash for a down payment, are okay with making double mortgage payments (and your lender is as well…), and don't need to sell your home in order to qualify for a loan, then you can afford to buy a new home before selling your existing one.
Typically, though, sellers sell their home first before buying a new one. This is to avoid making double mortgage payments, and to qualify for a loan. In addition, sellers are under less pressure to sell quickly. They can take their time looking. The only pitfall in selling first, is finding a temporary place to live while you shop around.
Selling Before Buying: If you want to sell your home first, but are concerned about being "homeless" for a time, you can negotiate with the new buyer(s) to lease back your old home or, you can choose to rent an apartment on a month-to-month basis in the interim.Buying Before Selling: If you decide to buy before selling, you can always write an offer "subject to" the sale of your current home. Although these type of offers are not uncommon, in a hot market, sellers are less likely to entertain such contingent offers. To remain competitive, you may have to waive the "subject to" contingency and straddle two homes at once in order to compete. In the San Francisco Bay Area, where I work, there is so much competition, due to low inventory, that an offer with a "contingent sale" (which is how we refer to an offer that is subject to, or contingent upon, the sale of the buyer's present residence) would not have much hope of being accepted in a multiple offer situation.
To learn more about buying and selling, select the following link:
http://www.realtor.com/home-finance/real-estate/general/buy-or-sell-first.aspx?source=web
- Douglas Lagos, "douglaslagos"
- Contributions:26
Hi,
You may start searching for a new home now, and once you find it, put your house for sale, with a contingency that you will close on your current home, when the other home closes.
This is quite easy to do, and all experienced agents should have no problem guiding you along.
You can also put a stipulation that you will stay in your current home (lease back) for 30 or 45 days after it is sold, to give you time to have everything set up in your new home.
Douglas Lagos
Realtor®, Certified HAFA Specialist (CHS)
DRE# 01921046
Coldwell Banker Residential
[contact information deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
- Holly Schwartz, "Holly Schwartz OC"
- Contributions:85
Hello User 1555983,
You sound like you are in a great position. Having enough cash to put 20% down is a positive. Of course, you will have more funds available when you sell your current home and receive the proceeds.
I honestly think that your strategy depends on timing and the current market. If you consider what is currently happening in the Southern California real estate market, many homes are getting multiple offers quickly after they go on the market since there is very little available. What this means for you as a buyer is that you will likely have a lot of competition when you make an offer, so you want to make your offer as attractive as possible... Some ways to do this is to have a well-funded bank account (which may come from the sale of your home) or to have a larger down payment.
What this means for you as a seller is that the current competition will help you to sell your current home quickly and for top dollar, which is always nice. As mentioned in some of the other answers, you could have your agent negotiate for you to rent back the property while you identify your new, larger home.
The benefit of this of course is that you are assured to sell to a buyer who is excited about your home now, while the market is stiff. You many also have multiple parties to present this option to in case some don't want to wait out a rent back.
Timing (and location of course) and VERY important in any market. I can see why your current agent would encourage you to put your home up for sale now. Why don't you discuss with them their action plan? I think if you are both open and communicate your concerns with each other you ill feel better.
Best of luck!
Holly Schwartz
Torelli Realty
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- Dorene Slavitz, "Westside Realtor"
- Contributions:708
I Can you qualify for a loan for the 'new home" without selling your present residence? I suppose that is the real question and one that needs to be put to a good Loan Officer before you proceed.
- Ofe Polack, "Ofe Polack"
- Contributions:3374
- Ellis Posner, "ellisposner"
- Contributions:4
The good news is that the transaction is much easier because you own the current home.
You can sell your existing home with a "leaseback" after the close of escrow. That would put the proceeds in your pocket and leave you in your current home while you look for your new home. Depending on how desirable your home is, the buyer may be willing to do a 30 or 60 day leaseback after the close of escrow. The leaseback can either be negotiated into the sales price or paid separately.
Another option is to list your home with a seller contingency - specifically that you find an up leg replacement property. In that situation, you accept an offer contingent upon you finding a new home. You may be able to negotiate up to a 30 day contingency.
In either case, because you need to proceeds to buy the new home, the timing of the transaction has to be closely managed so that you have your proceeds from the sale in a timely manner to close on the new purchase.
More information available at www.90266realestate.com.
- Denise Lavell, "BeachGirlRealty"
- Contributions:37
- Brian Teyssier, "Brian Teyssier GRI"
- Contributions:1512
I have my clients in your situation put their home on the market. We can accept an offer with the closing date set to accommodate us or we can rent back from the buyer.
Good luck!
How to purchase a new home before selling my existing home
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