Are you a homeowner looking to move into a new home? Navigating the homebuying process as a second-time homebuyer can be challenging, especially if you have a home you need to sell as well! There’s a lot of logistics you need to coordinate! This home buying guide will walk you through some strategies to keep in mind when you need to buy and sell a home at the same time.
Research your local housing market
The local housing market will play the biggest role in the timing of your home purchase and sale. Before you list your home or start looking for a new one, you’ll want to review your local housing market and see how long it’s been taking to buy and sell homes.
- Buyer’s Market: a buyer’s market means there are more homes available than buyers looking. This means homes will typically stay on the market longer and buyers have more options to choose from. In a buyer’s market, you’ll have an easier time buying a new home than selling your current one.
- Seller’s Market: a seller’s market means there are more buyers than homes available. This is a hot market! You’re more likely to sell your home first before you’re able to buy.
Choose an experienced real estate agent
Navigating the ins and outs of home buying and selling can be difficult so it’s helpful to have a professional available to guide you through the process. Hire a trusted real estate agent who understands your housing market. They will be able to advise on the expected market value of your home and the best strategy to buy and sell your home at the simultaneously.
Selling your home first
Selling your current home before buying your new home can be the less stressful option. The benefits of selling first mean you know exactly how much you can spend on your next home and have funds for the down payment. However, you may need to find alternative housing to tide you over until you’re able to move into your new home. Here are some options you can consider if case you sell your current home first:
- Make an offer with a settlement contingency. Once your home is officially on the market, begin looking for new homes. You’ll want to hold off on making any offers (if possible!) until you’ve accepted an offer on your current home. The settlement contingency means you’ll buy the new home once your current home closes. This method is best in a seller’s market when you’re more likely to receive multiple offers.
- Get a short-term rental. Secure temporary housing and storage (whether a short-term rental or staying with understanding family) until you’re able to close on a new home.
- Create a rent-back agreement with the new owners. If the new owners of your current home agree, you can sign a rent-back agreement that will allow you to stay in your home for a set period of time in exchange for rental payments. This will give you some additional breathing room to find your new dream home without the stress of finding temporary housing.
Buying your home first
Sometimes you find your dream home faster than planned. This is great because then you’ll only have to move once, instead of having to find a short-term rental or stay with family in the interim. If you happen to buy your new home before selling, you have a few options:
- Extend your closing. If you’re sure your home will sell quickly, you can request to extend the closing date of your new home past the typical 30-45 days.
- Apply for a bridge loan. Bridge loans are short-term loans that cover your down payment until closing. This is an enticing option; however, it can be difficult to qualify for a bridge loan and not every lender offers them, so you’ll want to check if this is available through your lender early in the buying process.
- Apply for a HELOC. HELOC stands for home equity line of credit. This enables you to use your home as collateral and borrow up to a certain amount.
- Rent your current home. If you’re financially able to purchase your second home without needing to sell your current home, you can consider turning it into an investment property and rent it out.
Don’t let the process rush you
Whether you buy or sell first, try your best to keep fear from rushing you through the decision process. You may want to create a contingency plan in case you sell your home before you buy. This will help keep some of the anxiety at bay since you already know where you’ll be going next. Conversely, if you buy your home first, don’t feel pressured to accept a less than ideal offer because you’re unable to float two mortgages.
Buying and selling a home certainly has his challenges, but if you’re properly prepared, you can navigate this journey with flying colors.
With new home communities in Idaho, Oregon, and Washington, we offer affordable new homes that fit your needs at any stage in life, backed by our commitment to quality. Visit us online at Hayden-Homes.com to learn what makes a Hayden Home the right new home for both you and the entire Pacific Northwest.