When it comes to buying a home, the ideal situation would be to find a new home just as you receive an offer on your existing home. You would then be able to close concurrently and move into your new home a few days prior to closing on your previous home.
This does happen more often than not, but anyone looking to buy a new home needs to consider all the possible scenarios.
Should you buy or sell first? There are many schools of thought on this subject. Ultimately, it depends on you and your situation.
For instance, can you afford to pay two mortgages in the event your original home does not sell by the time you move? Would you consider a bridge loan (a short-term, high-interest loan which lets you borrow against the value of your old home to cover the bills until you secure a new, larger loan)? Are you willing to move twice to find the home of your dreams if you sell first and can’t find your dream home fast enough?
This is where the advice of a real estate sales professional is invaluable. Real estate sales associates know the current market conditions. They are trained and experienced in working with home buyers and sellers to determine an ideal time to buy and sell.
It is generally less stressful to sell your home first, because you won’t have to worry about owning two homes at once. The market will dictate how long it takes your home to sell, as will your location and the time of year.
As a rule of thumb, it is a good idea to put your home on the market as far in advance as possible when purchasing a new one. But, if interest rates are good and there is a short supply of available homes in your area or price range, your home will most likely sell faster. In that case, you may want to purchase a new home first.
What if your present home sells before you find a new one? You may then decide to make an interim move or request to rent back your home for a specified amount of time as you continue to look for your new home.
Those may be worthwhile options if you have your heart set on a specific location or type of home, or if you are purchasing a new home still under construction.
If you buy a home before selling your present home, you may end up with two mortgages. Under those circumstances, you may be able to apply for a bridge loan to assist you in making two mortgage payments until you sell your first home. Your real estate sales professional can assist you in finding a lender.
If you do find that perfect home to buy before you sell your current house, maximize the possibility of a quick sale by consulting a real estate agent for the correct price according to the current market. When you are ready to list your home, be sure to prepare it for the sale by getting it into top shape. This includes painting, cleaning, making minor repairs and possibly even consulting a professional regarding the best placement of furniture in your living space.
So should you buy or sell first? Your own circumstances and a knowledgeable real estate professional should be able to help you make the right decision.
Toni McGowan is a senior vice president with Prudential Georgia Realty (www.PrudentialGeorgia.com), the 10th largest Prudential affiliate in North America and a Consumers’ Choice award winner in Atlanta the last two years. A North Carolina native and second generation real estate professional, McGowan has spent 25 years with Prudential Georgia Realty. She has been a top-producing realtor and a managing broker whose branch won the top office award 11 years. Reach her at [email protected] or call (770) 992-4100.