Wondering Where You'll Live Between Selling One House and Buying the Next?

Ask yourself these five questions to help you decide how to best manage your sell/buy process.

Current homeowners hoping to make a move into another house may wonder what to do: sell first or buy? 

Buyers enjoy a big advantage when their purchase offer does not depend on the sale of an existing home…but is a non-contingent home sale offer worth the worry about interim housing?  It all depends on you! 

If you’re wondering where you’ll call home during the buy-and-sell process, consider these five questions.  Knowing your finances, timeline, and risk tolerance will help you decide what works best for you.

Can you afford two mortgages?  If so, you may be able to buy a new home before your current one sells—a situation that can allow for a convenient move as you’ll likely have some time to vacate and set up new accommodations at a leisurely pace.  One downside is that bridge loans can be expensive, and you may not have a definitive timeline for how long you’ll need to cover both mortgages.  Perhaps you have other financing options like tapping retirement funds—talk with your lender to discover if and how you could finance two properties.  Think about how you might manage uncertainty about selling during the process.

What about if you decide to sell before you find the next house?  This scenario eliminates the potential to pay two mortgages, but “The obvious downside to selling first is that now you need to figure out where you’re going to temporarily lay your head,” says HGTV.  If this is your situation, ask yourself:

Can you stay with friends or family?  If this is an option, you may be able to save on rent…but consider that you might need to pay for storage space elsewhere.  And you want to avoid strained relationships should a shared housing situation go on too long.

How about house sitting?  The advantage here is that you could live rent-free—and maybe even get paid for watching someone else’s home.  It may not work out if you’ve got a pet, though, and if you have geographical limitations this may not be a good option.

Might a short-term rental work for you?  You’ll have to move twice, but if you can find a month-to-month apartment lease it could be a convenient way to manage your finances between transactions.  You may also find additional flexibility in your house hunt timeline.  Plus, once you’ve closed on your new home, you could move into it at your pace.

Can you rent back?  Some buyers, especially in a seller’s market, are willing to make their offer more appealing by allowing the seller to rent back their home for a short period of time.  This eliminates a double move, and a further plus is that buyers will have your rent payment to contribute to their new mortgage—a win-win.  According to HGTV, “it actually happens in about a quarter of home purchases in some markets.”

Much of the home buying process is out of your control as its many participants bring “a huge degree of uncertainty into the transaction.” 

Good understanding of your options, finances, and risk tolerance will help you determine whether writing your offer not contingent on the sale of your existing home is a good option for you.  No matter which path you choose, know that patience and the support of a good real estate team can help with a very stressful process. 

Post authored by Lora Bray.

Check out our reviews on Google.

You can find us here on Google.