CONTACT ME TODAY! JANET BUFF, REALTOR 281-414-1811 JANETBUFF@REALTOR.COM
Remember the days of stressing over buying your first home? Did you ever imagine it could get even more complicated than finding the right house in the right neighborhood? Now imagine the added stress of having to find a new house to buy upon having to sell your old house. For most people, ideally the chain of events would go - buy a new home, move, and then deal with the task of selling your previous house. But that ’ s not the most realistic scenario for two reasons. Aside from costing significantly more due to the fact you ’ d be paying for two mortgages, it also dampers your reputation with sellers because they might frown upon you holding onto your current home. Realtor.com listed 5 tips on their advice blog to make this whole process a little bit easier for you, and to prevent you from pulling out any hair you may have. 1. Know the market first Before anything else, whether you ’ re seeking out a new home or putting your current house on the market, make sure you completely know the housing market in your area, or the area you ’ re planning to purchase. A good question to ask yourself is if the market is geared towards buyers or sellers? After this you will be ready to strategize and plan how to go about things. Like in most cases, the winning decision will depend on who exactly holds the power. An important thing to also remember is to not pull all your eggs in one basket. Meaning don ’ t find one house you like and put solely everything in that one decision. It ’ s good to have appropriate options in the event a purchase falls through and you ’ re left house-less because of you ’ re newly sold home. On the other spectrum, make sure you hire an appraiser for your old home to price fairly. Unfortunately, the time for hopes and slight delusion regarding pricing is not now. Extra months on the market because you didn ’ t want to lower the price just means more months of paying double mortgages that nobody wants. 2. Plan your schedule carefully Buy first and then sell, or sell first and then buy? Both have their pros and cons. Selling first will make getting a new mortgage easier, but will also require you to find a temporary home to live. On the other hand, buying first makes moving easier. But it also alters your debt-to-income ratio, which will make it a little more difficult to qualify for a new mortgage, in addition of the hard task of trying to handle two different house payments. Gary DiMauro, a realtor for New York says it ’ s important to think beyond, “ How can I make the move as easy as possible? ” But to instead ask “ Can I handle two mortgages? What if my home sells for less than its listing? ” Whichever decision you end up going with, prepare yourself for the possible outcomes. Using a storage unit for your stuff and furniture and renting a place or finding friends and relatives to stay with temporary, or taking on the financial woes of two mortgages. 3. Don ’ t rely on timing It ’ s important to remember and to take in account that you ’ re not the only party involved in the formula. For every seller there is a buyer and for every buyer there is a seller. On paper you can layout the best plan possible, but it ’ s hard to predict and measure variables from the other party involved. Closings could be delayed, like buyers having difficulty securing their mortgage, or a home inspector can find issues that need to be addressed before you can properly move into your new home. Just know that even if you had planned to sell first and were prepared to live temporarily somewhere else while you shop around for a new home that even the best plans can go amiss. It ’ s best to brace yourself for this possible outcome, even how unlikely it may seem at the time, just to guarantee for an easy transition. 4. Know your financial solutions The process for those who decide to sell their homes first is pretty frank and simple besides additional costs for rental homes in the buying process of a new home. There is also the option of the rent-back agreement where you can bargain with the lenders and buyers to allow you to remain in your old property for at the most 60 to 90 days, in return of a lower selling price or rent cost to the buyers. This option can help to relieve the stress and pressure of finding a new home and give you more time to house hunt. But for those buying first, discuss with your agent and go over your options to lessen your financial risks. These are the two most popular choices: Contract contingency: Buyers can ask that their new home purchase be reliant on the successful sale of their old home. If you ’ re in a competitive market, then this is probably not the more ideal option. However, if the seller of the house you ’ re looking at has had some problems piquing some interest, then this option may be a great solution for all the parties involved. If you can convince them that your old home will sell quickly that is. Bridge loans: This allows you to own two homes at the same time if you can ’ t afford a second down payment. This is a very appealing option if you plan to sell your home first and want to use that money to purchase your second. Bridge loans serve as a short-term loan to be repaid once your first home has been sold. 5. Don ’ t let the fear rush you If you have successfully sold your first home but still haven ’ t found a new one, don ’ t let the pressure guide you towards a rushed decision. Don ’ t let the time constraints push you into a quick decision. Plan for a short-term rental home or if you have relatives or friends in the area, ask them kindly if you can stay with them for an allotted amount of time. You don ’ t have to settle or give up on some things that matter to you because you are in desperate need for a new home. And on the other side of things, don ’ t agree on a bid that you feel in your heart is too low for your liking because finances are tight. Having a temporary living situation decreases the likelihood of buckling under pressure and compromising. The selling and buying process can be pretty stressful, and having to do both concurrently can be even more daunting. But planning ahead for all the risks and obstacles, considering different options and then laying them all out before you will help to ease the process. Good luck!