Is It Risky to Buy a Home Before Selling My Current One?
Which comes first, the chicken (buying a home) or the egg (selling your current home)? There's no simple answer. Knowing and understanding your options can assist you in making the choice that’s right for you. There are often several advantages to purchasing a home before selling your current one, so we've listed several things you should consider.
If you continue to owe money on your current home, then you’ll need to be ready to afford two mortgages until your current home sells. How quickly that happens depends on the housing market in your area. Having two house payments will limit your purchasing power for a replacement home.
Selling before you purchase gives you the advantage of knowing the precise amount you'll be able to put toward your new home purchase. While this might provide you with more peace of mind and buying power, it could mean missing out on homes you see searching during the period of trying to get yours to sell.
You can take it slow with the buying and moving process. You’ll have longer to buy a replacement home that has the features and is in a nice area that you simply want to live in. Then once you purchase your new home you'll move in at your own pace, and put your current home on the market when ready.
On the opposite hand, if you sell your current home before buying, you face the likelihood of not having a place to live and having to rent until you buy. Including possibly renting your current home from the new owners depending on their situation. Or, once you've got an offer, you can begin buying your new home and do your best to coordinate closing dates. While not impossible, this would take a touch of finagling and tons of luck. The best route, if you are trying to avoid renting, would be to buy first then sell.
Ask the Professionals
R.E. Shilow Realty real estate agents can estimate the worth of your current home and how fast it'll sell on average depending on the market and how it's moving near you. They will also assist you in finding information about neighborhoods you're curious about moving to and the amount of buying power you’ll need for the house you would like.
A mortgage lender can assist you in finding out if you'll afford to possess two mortgages. They will also inform you about the way to use the equity in your current home to assist with the down payment on your brand new home.
Have more questions on buying a home before selling your current one? Contact me with the information below for more information.
Find our last blog about 'Home Staging Cost' here