Selling & Buying at the Same Time?!

What do you do if you’ve found your dream home but your current home still hasn’t been sold? Do you have to let your dream home slip between your fingers because you’re still waiting for someone to buy it? No, you don’t. 

Here’s how you can buy and sell a house at the same time without going bonkers in the process: 

• Know Your Financial Situation

Before you start looking for a house, it's important to look at your finances and see if you can afford to buy one. Keep in mind that you won't have access to the equity in your current home until after the sale, so you may need to reserve funds for a down payment on your new property. If you buy a new home before selling your current one, managing two mortgage payments can be challenging. Therefore, if you are living paycheck to paycheck, buying a home may not be financially feasible.

• Value of Your Current Home

Knowing the estimated value of your current home is crucial from the outset. A trustworthy real estate agent can do a comparative market analysis and give you tips on how to raise the value of your home.

• Consult a Trusted a Real Estate Agent

A trustworthy real estate agent can connect you with a lender to discuss your options. The lender will consider the value of your current home, your income, and your desired purchase price when approving you for a loan. Your debt-to-income ratio will also be evaluated.

• Inquire About a Bridge Loan

If you don't have enough assets for a down payment, you may be eligible for a bridge loan from your lender. These short-term loans act as a bridge between buying and selling a home. Although they can be beneficial, the interest rates are typically higher. However, you can use the equity in your current home as collateral for a bridge loan to cover the down payment on your new home.

• Be Flexible on Contingencies

Putting in an offer that depends on the sale of your current home could be a good idea if you can't afford to make payments on two homes. The contract would state that you could get your earnest money back if your current home doesn't sell. While this approach removes financial risk, it may also make your offer less attractive.

Reference: https://www.homelight.com/blog/how-to-sell-and-buy-house-at-same-time/