How To Buy A New Home But Sell Your Current Home First
Just a heads up, this won't be easy but it can be done with a plan. Without a plan, you risk settling with a low offer for your home just to get it sold and/or settling with any home to buy so you won't be homeless. Here are 3 strategies to avoid those scenarios.
1. Contingency Sale and Purchase
This is where you list your home with a Contingency of you finding a new home. Also for making offers on the new home, you will have a Contingency of you selling your current home. Here are examples for each Contingency.
Let's start with the sell of your current home. You get an offer but you will only accept the offer if you add a Contingency of you finding a new home. If you don't find a new home, you can cancel and not sell your current home.
For the new home purchase, you'll make an offer with a Contingency of you selling your current home. If your current home doesn't sell, you can cancel and you don't have to buy the new home.
These Contingencies protect you but one thing to keep in mind is some buyers for your current home and some sellers of the new home can be turned off because of this extra hurdle. Which means less potential buyers and less potential sellers willing to work with you.
2. Double Move
This is where you list your home for sale and plan to move into a short term rental or even possibly a family or friends home for the short term. Moving isn't fun so doing it twice makes it even worse but this strategy takes away the Contingency and you won't feel pressured into buying a new home right away. One of the worst feelings is buyers remorse so take your time and doing a double move maybe worth it in the long run.
3. Rent Back
This is where you list your home for sale without the Contingency but you will rent back the home from the buyer for 30, 45, 60 days or any reasonable amount of time after the close of escrow. This gives you time to find your new home and possibly avoid the double move. Plus, once you close escrow on your current home, you don't have to make offers on the new home with a Contingency. But if you can't find the new home, you will have to do the double move and find a short term rental. Lastly, the amount for you to pay for the rent back is negotiable but it's usually the Buyer PITI (Principle, Interest, Taxes and Insurance). Some buyers may not like the rent back idea because they would like to move in right away but this is a better option versus having a Contingency.
These are 3 strategies but everyone has different situations so if you would like to discuss which one is right for you, please call 858-349-2390 or email email@example.com.
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