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What comes first, buying or selling?

Posted on : 23-11-2010 | By : Sumina | In : Education

0

A question I get fairly often from clients is,  ‘When looking to sell a home and buy another one, what is the process?’ Buy first, then sell the old house? Put the current home on the market? Find a home I like then put my house on the market?  HELP!

Well really, there are only a few options, and much of that will be determined by what your financial position is. confusing sign - mod

  1. Sell your home, rent for a few months, and then buy a home
  2. Sell your home and while it is for sale, find your next home and move
  3. Buy a home, move, and then put your now (old) home on the market. This is not an option for everyone because of the Very Important Question below.
  • Can you afford to buy a home without selling your current home? In other words, are you financial secure enough to manage dual  home payments? Even if YOU think you are, will a lender or bank?

It’s important that you talk to a lender to get a good idea of what you can afford and that will help dictate what the process is going to be. So let’s go with the assumption that you WILL need to sell your current home in order to purchase. Here’s what I would suggest:

  1. Put your current home on the market. Talk to your lender about the expected selling price and how much home you can afford.
  2. Start casually looking at homes in the area you think you’ll want to live in. Casually meaning, on the web, open houses, etc. This is not an all out fall-in-love-with-a-house-you-can’t-buy type of looking.
  3. Once you get a contract on your current house, then, and ONLY then, we can move forward with getting a contract on a new house. Things can get tricky with timelines, and often you’ll be selling your house and buying a new house in the same day. You can also do a lease back for a few days if needed, but not all sellers are okay with those for a variety of reasons.

So that’s my suggested route. Of course my disclaimer is that every area is different, every market is different, and every time is different (this is not the same market as 5 years ago) as is every situation. So talk to your preferred agent or lender. What may have worked for you best buddy 2 years ago may not work the same for you.

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