How To Buy A New House Before Selling The Old One – Ask Susie – Real Questions From Real Buyers, California Home Ownership, Downsizing & Proposal 19, Home Buying & Ownership, Home Selling, Selling Strategies & Stories April 18, 2023
Buying a new home before selling your own house or condo in cities like Oakland, Berkeley, and Alameda can be a challenging process.
How To Buy A New House Before Selling The Old One
One of the biggest challenges in buying a new house before selling your old one is managing the financial aspect of both transactions. If you have enough money to cover both mortgages at the same time, this may not be a problem.
How Much Work Should You Do Before Selling Your House?
Here are some things my clients, their lender and I (their agent) consider when determining whether it makes sense to buy before selling.
Consider 3 options for selling your house and buying a new one 1) Loan to help you buy a new house before you sell, if you have a lot of equity
Bridge loans are what most of us think of when it’s time to buy before we sell. The easiest way to think about this type of loan is that it
Crosscountry Mortgage describes a bridge loan as “a second trust that is secured by the borrower’s current home so that the proceeds can be used to close on a new home before the current home is sold.”
Should You Renovate Before Selling Your Home?
Bridging loans may have certain requirements as far as how many payments you have to make and how many points you have to pay.
There is an alternative to bridging loans. A “cross-collateralized” or cover loan. “The new loan pays off the existing home’s first mortgage and finances the purchase of a new home (both the old and the new home are attached to the mortgage as collateral).” as explained by JVM Lending.
It is important to speak with a financial advisor or mortgage broker to find out what options are available to you and which will be the most financially viable for your situation. (Here’s more about bridging loans from JVM.)
2) Wait until you have a buyer for your current home before you start looking for a new one.
Should You Sell Your House Before Buying A New One?
In 2023, a number of my buyers have offered leasebacks to sellers who had to complete their new home purchases before moving. It can be done – without the seller becoming a “tenant”.
Case Study: My clients got a contract on a home where the sellers had already identified the house they wanted to buy. Their pre-approval was put up on the new house, giving the buyers of their old house assurance that they would definitely leave when the deal closed. The sellers would only need a couple of weeks to move out after their house sold.
In California, leasebacks use a legal form called “Seller in Possession” that allows the seller to live in their current home for a specified period of time after the sale, giving them time to find and move into their new home.
This can be a good option if a seller needs extra time to complete renovations or if you have children in school and don’t want to disrupt their education – as one seller agreed with my buyers in San Ramon this year.
Advantages Of Buying Before Selling
Despite the ability to live in the home while it’s on the market, it’s a good reason to move out.
The National Association of REALTORS® released results from a 2023 agent survey that makes a strong case for moving so your house can be staged.
Staging a house is just as important as a good cleaning, painting and landscaping for curb appeal. The facts:
On vacant homes for sale, Bay Area listing agents will often provide a blue “SUPRA” lock box for buyer’s agents to access a property. The SUPRA lockbox ensures that only active, licensed real estate agents can get the key to a house for viewing.
How Do You Buy A House Before Selling One?
There really is nothing better than the ease of using an electronic keyboard to show a vacant, staged house anytime between 08.00 and 20.00. Such a lock box naturally leads to more agents showing a house that is for sale.
Because our real estate markets tend to have strong demand, especially in the $750,000-$1,500,000 range, it is easier to sell as an owner-occupied home than elsewhere.
Unless your house is absolutely spectacular, you as a seller must be completely flexible in order to bring in as many buyers as possible. For example, you should be willing to have only 1-2 hours notice to leave their house before a showing. If you can schedule a couple of weekends away to allow for some open houses, that’s even better.
Still, the pressure to coordinate schedules with busy buyers makes it much easier to skip showing a house (unless a buyer has specifically asked to see it, of course).
What To Know About Buying A House Before Selling Yours
3. You can get to know the area you are moving to by renting for a few months before buying.
Moving doesn’t have to be negative. After all, instead of putting down roots immediately by buying a new house in a new location, renting lets you test the waters.
In addition, moving is a good chance to finally get rid of everything you’ve been meaning to get rid of. (Buy Nothing groups on Facebook and Nextdoor as well as “free” groups on Craigslist are wonderful ways to move items.)
PODS allows you to upload a “pod” for storage, keep it stored, and then have it delivered to your new home for unloading.
Navigating Real Estate: How To Buy Your Dream Home Before Selling Your Current Property
With some careful planning, flexibility, creativity, preparation and a hard-working real estate agent and lender, it is very possible to successfully buy a new home before selling your own.
Ask me for introductions to a financial advisor or mortgage broker to determine your options and create the best strategy for your situation.
With a little patience and persistence, we will find the perfect new home while still managing the sale of your old one! cross-disciplinary editor with a passion for personal finance topics. After a decade of working in public libraries, she now writes, edits and researches as a full-time freelancer. Read more Connect with Meaghan Hunt on LinkedIn Linkedin Connect with Meaghan Hunt via email Email Close Meaghan Hunt
Edited by Michele Petry Michele Petry Senior Editor, Home Lending Ribbon Expertise • Real Estate • Housing Market Michele Petry is a senior editor for , and leads the site’s real estate content. Read more Connect with Michele Petry on LinkedIn Linkedin Connect with Michele Petry via email Email Close Michele Petry
Complete Guide To Buying A House Before Selling Your Current Home
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