Buyers who are downsizing or moving up often have a dilemma. They can’t decide whether to contract to buy their new home first or to list their home for sale.
If they put their home on the market, it might sell and then they might find it impossible to find what they want. Alternatively, if they find a home they’d love to buy, they realize they could lose out because their old home won’t sell quickly enough or the sellers won’t wait. What is the best approach? Families looking for homes for sale Charleston are always asking this to the guys over at Premier One and for them they have some suggestions:
We’ve noted so many times that there is seldom a “right” answer. This is another such instance. Looking at some of the alternatives and how they could work for you might make it easier to figure out how to approach getting from where you are to where you want to be.
Let’s say you decide to put your home on the market first because you want to be sure of the amount of money you’ll have to work with.
You could apply for a home equity line of credit before putting your home on the market. If you have a significant amount of equity in your home, this can provide you with down payment and closing costs for your new home.
You can then shop for a new home and write a contract contingent on the sale of your old home. If the seller will not accept the contingency, you could choose to remove the contingency.
Let’s explore another possible scenario. Let’s say you decide to put your home for sale and get a contract before looking for another house. You (or your Realtor) begin to market it. Your home is getting lots of showings and you’re sure you’ll get a contract soon.
You decide you’ll do some preliminary shopping and “fall in love” with a house before you get a contract on your home. The seller may not accept the contingent contract. Is there any way you can avoid losing out on the purchase of this home?
It isn’t cheap, but if you have very good credit and a lot of equity in your home, you can probably get a bridge loan and buy the house. Bridge loans have a high rate of interest and are for a period approximately six months. Typically you can borrow up to eighty percent of the equity in your current house to come up with the down payment you need this way.
As always, there are many choices. We’ve only mentioned some of them here. You might want to start by meeting with a lender to determine specifically what is possible for you. Maybe you can use the ideas in this article as a starting point for the conversation. Who knows where it will lead? It could be the beginning of developing the perfect strategy for you.