Today we’re going to continue our conversation about making the transition from your current home to your next home. Previously, I explained the process of buying your next home first, then focusing on the sale of your home.
I understand that not everybody wants to or has the ability to go that route. That’s why today I’m going to talk about how to make the transition if you need to sell your current home first.
The first thing you need to do is have a conversation with your lender. You want to find out what kind of rate you are going to get and the terms of the loan that you’re offered before you decide to list your current home.
If you’re going down this path, there are a few things to consider. First, you won’t be pressured into finding the ideal home as your current home is on the market. It gives you a little bit of wiggle room and alleviates some of that tension.
Next, decide where you’ll live in the time between when you sell your current home and when you buy your new one. Some will stay with friends and families, some will do a short-term lease, and some will actually just stay at a hotel to give them some buffer time.
The other option you have is a lease-back. Once you have officially closed on your current home, you become a tenant in the home that you own. Typically, this will be a couple of weeks or a couple of months if the buyer is willing, which will give you plenty of time. Not every buyer is willing to do a lease-back, though. If you do pursue this route, you’ll need to switch over your homeowners insurance to renters insurance.
Some people prefer to make this transition as seamless as possible so they don’t have to move twice. In order to make that a reality, we have to close on both transactions on the same date. This can be difficult to pull off, but it’s not impossible. In order to make this happen, it takes a lot of focus, discipline, and a lot of people doing their job.
One thing that’s crucial for you to do when you make an offer on your new home is to make it with a contingency. It will protect you in the event that your home doesn’t sell prior to closing on your new home. This makes your offer contingent on your home sale. It’s not the most attractive offer to sellers, but it’s one that they do accept from time to time.
It’s always important to have a Plan B. That way, you can be covered even when there are some delays in either transaction.
Waiting to list your home until after you’ve found your new home sounds like a good idea in theory, but it’s really not. Here’s what usually happens. You find the perfect home to buy that meets all your criteria and you want to make an offer, but you’re going to be submitting a contingent offer that’s much weaker. If your home isn’t on the market, that makes the seller much more hesitant to accept your offer. Buyers lose a lot of transactions these ways.
There’s a lot more information to consider during this process and if you have any questions about it or about anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.