In a perfect world, you would be able to comfortably sell your home before buying another home. After all, no one wants to get stuck paying two mortgages. The unfortunate reality is that this is not often possible. At Berkshire Hathaway HomeServices we get questions all the time from potential clients about whether they should put their home on the market first or sell their home first.
The answer is not a simple one and many things must be considered. However, we want to stress that it is possible to buy a home and sell a home at the same time – and we can help you do it. Today we are going to share a few strategies that will help you do so successfully.
Have a home in mind to buy but don’t make an offer
One option is to always have a home in mind that you are ready to buy if your home gets an offer. We recommend having a few different suitable options in mind. This allows you to quickly get into a new home when your home sells, without having to worry about your home sitting on the market for months.
List your home for a fair price and offer a fair price
The key to buying and selling a home at the same time is to ensure that your home sells as quickly as possible. The best way to do that is to hire an appraiser and to get a fair price for your previous home. If you have all the time in the world then you may want to try and get top dollar, but if you are at risk of paying two mortgages, then you can save money in the long run by selling your home quickly for less compared to paying duel mortgages or three months just to make a few thousand extra dollars.
Consider the financial and credit implications of buying first versus selling first
There are a number of factors to consider when deciding if you should buy or sell first, including your financial situation. If you have a current mortgage then you may have a hard time getting approved for an additional mortgage because your debt-to-income ratio will be skewed. Yes, it makes moving easier if you buy first but it can be difficult to qualify for a second mortgage when you are still paying your previous mortgage.
There are options that give you more time within your home
There are also options that can allow you to sell your home but remain in it for a period of time. This is known as a rent-back agreement and it allows you to negotiate with the lenders and buyers to stay in the property for up to 90 days after the sale. Depending on the agreement, you may get a lower selling price or you may pay rent to the buyers. However, it could relieve some of the pressure of finding a new home.