Selling One, Buying Another
In a perfect world, you sell your old home and buy the new one on the same day. Given that things rarely turn out perfectly, here are some things to keep in mind as you negotiate the sale of one house with the purchase of another.
Time it right
Fall and spring are the best times for homes to move and you want to consider the season of the year when buying and selling. And if the closing dates arent going to coincide, a gap rather than two mortgages is the better. Its easier and usually cheaper to find temporary housing than juggle two mortgages.
Selling First
Buying First
It happens. Youre only thinking of buying, and suddenly the right home shows up. Now you have to sell your old home quickly. Here are some tips on making things work in your favor:
Same Market or Across Country
Generally, if youre buying and selling in the same market, you can negotiate closing dates to work for you. But when youre dealing with a cross country move, its a lot harder. A real estate professional really comes in handy at this point. Legal documents can be faxed or sent via overnight courier and your focus wont be stretched to the limit. You may end up renting one home or the other, or have to consider a bridge loan. But with someone local in the market on your side, it will hopefully be less stressful.
Show Me the Money
Make sure you have a tight hold on, and a clear understanding of, your financial situation. Cash reserves are always helpful, but never more so than during the purchase of a home. Two to three months is the recommended reserve, but if you dont have it, this is where the bridge loan comes in handy. Some lenders are more inclined to make a loan if its for the purchase of a home. If youre a smart shopper/seller, youll accept an offer from someone whos flexible about move-in dates. It can save you money in the long run. Too many moves with storage costs can quickly eat up any profit you may have made in the transaction.