Need to Sell Your House Before Buying Another?
By Lighter Side Staff
Here are 5 Concerns You Likely Have (And How to Deal with Them)
Most people don’t feel like being a first-time home buyer is a walk in the park. It can be difficult to scrape together enough of a down payment, find a house you can afford, and manage to outbid all of the other buyers vying for it. But buying another house when you’re already a homeowner can make you wish for those simpler times in life!
The good news is, as a homeowner, you’ve probably built up some equity in your home, making it possible to buy a bigger, better home. But it isn’t like that money is sitting in your bank account waiting to be spent the minute you find a house you want to buy. Many people need to sell their current home in order to buy another one.
So if that’s your situation, perhaps it’ll help to know that you’re not alone, and plenty of people have managed to pull it off. Check out these 5 common concerns people have when they need to sell before buying, and some tips on how to deal with them:
1. What if I don’t find a house I want to buy?
Being concerned that you won’t find a house you like is a legitimate concern. Unfortunately, waiting to list your house until your dream house appears on the market isn’t a recipe for success. Doing that will usually lead to rushed decisions which can cost you money on the sale of your home, and/or the house you were rushing to buy ends up getting scooped up before you’re in a solid position to make an offer.
The best approach is to have your agent show you the data for recent home sales, and help you analyze if what you’re looking for is something you can reasonably expect to find in your price range once your home is sold. If there tends to be at least a few homes you’d like on the market in your price range at any given time, you should be in fine shape to find one you like once your home is under contract.
2. What if the specific house I want to buy sells before mine does?
As mentioned above, falling head over heels for a house before your current home is even ready to be listed for sale can cost you money… and heartache. Regardless, a lot of people list their house for sale hoping they can manage to get their house sold faster than the seller of the one they want to buy.
If you choose to go this route, the best approach is to price your house aggressively and hope you can get yours under contract before the one you love is. But you can try to make an offer contingent upon the sale of your home. Just be aware that many sellers aren’t too keen on accepting a contingent offer. Think about it: would you want to take your home off the market for a buyer that needs to sell their home, and hope that they manage to do so in a timely manner? It’s a big ask, so you can certainly try, but just don’t bank on most sellers being agreeable to it.
3. What if I get stuck with two mortgages?
Some people can handle paying two mortgages, at least for a little while. But even if you can, it’s probably something you’d like to avoid, or keep to a bare minimum.
In order to avoid this, don’t go under contract to purchase a house until yours is under contract, and all of the contingencies have been met by your buyer. This will minimize the chances of something going wrong. But you can also try to add some language into your contract that makes your purchase contingent upon the closing of your home, just to be safe.
4. What if I sell too soon and the market changes?
Some sellers worry that as soon as they sell, the market will take off right after, leaving them thinking, “I could’ve gotten so much more!”
Is it possible? Sure. Is it likely? Probably not. The real estate market usually isn’t as volatile as the stock market. Of course your house could be worth a lot more in the future… if you wait long enough! But waiting a few weeks or months (or even a year) probably won’t line your pockets with that much more cash. And remember, the opposite could happen—if you wait, the market could also go down! Base your decision on what the current value of your home is, and don’t get caught up trying to time the market.
5. Where will I live if my house sells and I haven’t found or closed on a house I want to buy?
The idea of selling your home and being left with no place to call your own can be terrifying. Will you be left living out of your car, or worse, your in-laws’ guest room? (Kidding! They probably love having you.
The good news is, you’ve got options. Sometimes the best option is crashing with family! But you could also find a short-term rental, or stay in a hotel if you just need a little bit of time between closings. But you can also try and negotiate with the buyer of your house to give you a flexible closing date, or make the sale contingent on you finding a house to buy. And you can always try to make a deal with your buyer to stay in the house after closing and pay them rent until you find a place.
