It’s rare to sell your house and then live in a hotel while you look for a new one. The cost of a five-star might drain your budget because you never know how long you have to wait to get your next property. Most times, we want to sell our old house to help cover most of the costs in purchasing our next property.
Managing this can be extremely difficult because what do you do when your real estate offer is accepted, but you still haven’t found your perfect dream house. What do you do if you need the money from your old house to make a down payment for the new one? No need to worry; we’ve got you covered with three essential tips below.
Tip #1: Do Your Research
Before you start on your journey, the best and most important thing you can do to buy a new house while selling your old one is to do some research. Talk to a real estate agent who can explain and maybe provide you with some potential options.
Additionally, you should ensure you have the best agent who knows and understands your needs and the options that exist. They can help by giving you information on what your house could list for at the moment. A good agent also understands your timeline and can help to gauge.
A real estate agent usually will also consider your current financial situation, the condition of the house you own, your timeline, and the equity of your current house.
Tip # 2: Sell Your Old House First
This may sound ridiculous, but many people choose to sell their existing houses first. This works well for you as the seller, because it reduces the financial strain on you by eliminating one mortgage to create another without having two mortgages running simultaneously.
The only downfall with this is it leaves you homeless while looking for a new one. Most times, people opt to live with family until they find the perfect new home. It’s not always the best idea because you could be stuck in a stuffy basement. However, you’re one step ahead with this option because you have the down payment ready for the new house.
Tip # 3: Use a Sale-leaseback Contingency
Contingencies protect buyers’ and sellers’ interests when negotiating a deal or buying property. The seller requests a sale-leaseback to buy some time to purchase a new home after selling theirs. As the buyer and seller negotiate, the seller will reach an agreement with the buyer on how long the leaseback will be with a monthly rental.
This works out perfectly because you get to have the money and still live in the house for some time. It’ll cost you, but not as much as a five-star hotel.
Usually, the buyer charges rent higher than your mortgage at the current market rate. However, you’ll save yourself the hassle of moving twice, like when you sell your house first and live with family for a while. The downside of this is an increase in your short-term expenses.
Buying a new house while selling your old one can be a challenge, but that doesn’t mean it’s impossible. We hope you can find a favorable option in one of the three options listed above. Good luck!