Purchasing a home is a major decision. A house is a place where you’ll spend the majority of your waking hours for several years at least, so it isn’t something that you can determine on a whim. Take as much time as you need to find the home that best meets your needs.
Some people are actively looking at buying a new home while trying to sell their current home at the same time. There are various reasons why this happens. Homeowners may need to move in a hurry due to a change in jobs or financial position.
Others may feel the need to live closer to family or friends, or just need a fresh start in a new location. This can be accomplished, but it may take a little extra time and effort.
Buying a home in Tennessee isn’t always easy. You have to pay attention to current market trends and conditions, and there may be delays or problems that pop up along the way. Being patient, persistent and having a good plan of action are essential for your success.
Here are a few things that you can do if you’re planning on buying a home while selling another:
1. Think about your financial obligations.
One of the main reasons why people decide not to purchase a home while trying to sell their current residence is that they may have two mortgages at the same time. It’s often temporary, but paying multiple mortgages can deplete your savings quickly if the home that you’re living in now doesn’t sell right away.
You could be stuck in that situation for several weeks, months or even years. There may also be things that go wrong, such as a broken refrigerator, faucet, stove or other items that will need to be repaired or replaced in the meantime that you’ll be responsible for.
It may also be more difficult to acquire a new mortgage when you already have one. Some sellers may depend on selling their home before they can put a down payment on the new property that they want to purchase. If you find yourself in this situation, talk to your lender as soon as possible. Explain your situation and what you intend to do. They may be willing to accommodate you.
You may consider some short-term loan solutions. HELOC (Home Equity Line of Credit) and bridge loans may be available in your area. A HELOC loan borrows against the equity that you’ve built up in your house. You may be able to borrow enough for a down payment. Just be aware that lenders can legally ask for such loans to be paid in full after either one or three years.
A bridge loan also allows you to use your home equity to borrow funds. Bridge loans tend to have larger payments and higher fees and penalties. These are temporary alternatives. Each one of them has their own associated risk.
You’ll also have other responsibilities beyond the mortgages. You’ll need to pay for closing costs on the new home that you’re buying. There will be the usual monthly utility bills and any necessary repairs or upgrades on the home that you’re selling. It’s a good idea to examine your finances carefully to find out what you can and can’t afford at this time.
2. Talk to the home seller.
You can make an offer on a house that you really want to buy. You may want to talk things over with the seller. Tell them that you’re planning to sell your current property. They may decide to negotiate with you.
You can add contingencies to the purchase agreement. For example, you might add a clause stating that the sale is contingent on your ability to sell your existing home. This might delay the transaction, but at least you’ll be able to afford the new property after your residence has been sold.
3. Work with a realtor.
A veteran real estate agent can be a valuable asset. Many realtors have several years of experience and knowledge in the market. They’ll most likely understand your condition because it’s something that they’ve seen multiple times.
Your realtor should schedule open house showings for properties that you may be interested in. They can also provide information about current market trends that can help you establish a reasonable asking price for your home.
Setting a price that’s too high can leave your house unsold for long periods of time. However, an asking price that’s too low could cause you to start fielding offers before you’re ready.
4. Create a timeline
It’s important to know how much time you need to sell your home and find a new place to live. The process could take several months or even a year or two to complete. That’s why it’s a good idea to develop a timeline.
A timeline can help you track your progress. You can set short-term, long-term and intermediate goals along the way. If something is taking longer than expected, you can examine where you’re at and determine if there are other steps that need to be taken.
If you need to move in a hurry, you may decide to put your house up for sale at a price that’s below market value. Just be prepared to start fielding offers on your property after it’s been put on the market. Once you’ve found an offer that is reasonable, you can accept it or offer to negotiate if necessary.
Most experts recommend selling your existing home before buying another one. This lessens your financial burden. You should have enough for a down payment and your monthly mortgage payments and utility bills after you’ve received your proceeds from the sale.
It’s okay to look at houses while you’re attempting to sell a home. There’s nothing wrong with thinking about where you want to live and what amenities you prefer. You can start researching houses and scrolling through real estate listings once you’ve decided to put your home up for sale. It can give you a realistic perspective of what’s available.
You might have to rent living space or move in with friends or family members temporarily until your home is sold and another house is purchased, but you can definitely accomplish your goals. You’ll probably be settled in your new home before you know it. It may be challenging, but the efforts are well worth the rewards. Just think how relieved you’ll be when you’re living in a place that you’ll be glad to call home for many years to come.
Have Questions? Ask The Lumiere Team!
Your real estate agent is the best source of information about the local community and real estate topics. Give Rebecca Edwards call today at 901-451-2001 to learn more about local areas, discuss selling a house, or tour available homes for sale.