Here’s How To Buy a Home Before Selling One
Selling a home in 2021 can be easy, but buying one is a whole different story. Low interest rates continue to be the driver in this robust housing market, creating increased buying power. On the other hand, the limited number of homes for sale and the high level of buyer demand has created a market tilted heavily in favor of sellers.
In this highly competitive market, what do you do if you want a smooth transition when selling and buying a home concurrently? It’s one of the least risky times to buy your next home before selling your current home. If you’re able to handle the payments on two homes for six months or so, then buy first and sell later.
For those that may not have the funds available to purchase a home while owning one, here are some options to consider.
Home of Choice Contingency. Written into the contract, this agreement protects the seller from having to sell their current home before finding their next home.
Rent Back Agreement. This post-closing occupancy agreement allows the seller to continue to live in the home for a fee or for free, typically up to 60 days, temporarily making the buyer the landlord.
Bridge Loan. A bridge loan enables you to borrow money to pay for the down payment on your next home based on the equity in your current home.
Home Equity Line of Credit. Tap into the equity of your current home by taking out a home equity loan before you put your home on the market to provide the funds needed to make your purchase first.
In this market, whether you’re buying or selling a home, a Fonville Morisey agent can help evaluate your options to decide which to do first and how to optimize both transactions. In addition, Fonville Morisey’s partners in mortgage, title, insurance, and property management can assist you every step of the way.