Buying your next home before selling your current one is convenient in some ways, but a hassle in others. Let’s discuss this strategy in greater depth today.
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Given that interest rates are at their lowest point since 2015, it’s a fantastic time to buy a home. But what happens if you also have a home to sell? Today, we’ll discuss how to juggle two transactions.
Your first option is to buy first and then sell. While doing this will ensure that you aren’t without a home to move into once your current home is sold, it can create a financial strain. If you can’t handle temporarily holding on to two mortgages at once, this option might be difficult to manage.
Your second option, then, is to sell your current home before buying your next. Doing so will allow you some extra “padding” financially speaking, as you would be able to use the funds from your home sale to facilitate your home purchase, but it can be stressful trying to find a new home before your buyer begins living in your current one.
“The bottom line is that it’s important to consider all aspects of whatever buying or selling strategy you choose before you make up your mind.”
With that said, let’s focus on the first option for now. As we already discussed, buying first affords you more time to go through both transactions. It also reduces the amount of pressure you’ll feel during negotiations, as you won’t have to worry about convincing the other party that you’ll be ready to close when they are. Both of these factors combined also make it possible for you to have greater leverage over the price you buy and sell each home for.
Of course, there are drawbacks to this option. You need to make sure you have enough money set aside to buy first before you make this kind of move. Not only will you have to account for the down payment, but you’ll need to be able to cover two mortgages for a while, as well.
Another disadvantage of juggling two transactions at once is that you may have to include more contingencies in your contracts, which can make your deal seem less appealing.
The bottom line is that it’s important to consider all aspects of whatever buying or selling strategy you choose before you make up your mind. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
