Home Selling And Buying: Which To Do First
You have made a choice to sell your home and buy another. Which comes first…buy or sell? Either one is complex. Doing both is more daunting. Which should you do first? Some tips from a Houston Heights Realtor.
You have 3 basic options in deciding whether to buy or sell first:
A. Sell your current house, close on it, then look for and close on your next house…No worries about 2 mortgages
B. Make a “contingency” offer on a house…The closing on this house is contigent on you selling yours…Why would a seller accept this?
C. Purchase the second house; then put your first one on the market and sell…Now you have 2 mortgages.
A… is the simplest safest answer. Sell your home first, and then buy your next one. You don’t have to worry about whether your house will actually sell. It is sold; you have the money to do whatever you want. Also, the seller you purchase your next house from knows you are serious. In fact , you’re now homeless.
B… is the weakest way to purchase a house. The contract is “contingent” upon sale of your present house. That means if your place fails to sell, you can back out of the contract and get your earnest money back. What seller would take a low offer on his home; take it off the market; risk losing a “real purchaser” in hopes that you can sell your place in time to close? Not very many would do that. That is what makes a contingency offer so shaky; the purchaser is simply not in great position. He would like to close on it; he hopes to close on it; but he will not be positive he is going to close.
This choice is stronger however; if your home is on the market and under contract. You can be more confident. Go forth and buy! The owner of the house you have an interest in knows you are serious.
C… is a rare option because few home buyers can afford more than one mortgages. (Your lender makes that call, and they hate risk). If however , you can swing two mortgages, you can purchase your new residence and then put yours on the market for sale. Price it right though, nobody wants 2 mortgages for very long.
Other circumstances can make a difference: Are you getting company re-location assistance? Maybe they would pay that 2nd mortgage until your home sells.
As I pointed out, option A… Is the most powerful/safest position, but involves two moves, which nobody likes. One choice could be to sell your existing first, but with a long closing period. If you had a 60 day closing period on your current home, that should be sufficient time to find and contract for your next home.
Other factors to consider: What’s your housing market like? If it’s a Buyer’s Market, you definitely need to sell your home first. If you have moved into the new house, then find out you can’t sell your old one, you would be definitely hurting. How difficult is it to calculate future house sales in your area? An older neighborhood with no two identical homes, like turn-of-the-century Houston Heights Homes aren’t as simple to estimate time for property sales.
As a wrap up: Sell your current home first, then buy your next house , unless some of the circumstances above apply.
Rich martin is a Houston Heights Realtor, selling mid century and older homes in inner loop areas of Houston. Inner loop area homes such as Woodland Heights homes is his specialty.
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