If you are a current
homeowner that wants to purchase a new home, you're most likely asking yourself
a question common to folks in your situation: Should I sell before I buy?
The answer to that
question depends on several factors.
Your Personality
Just the thought of
having two mortgage payments—even for a short period of time—can cause massive
anxiety for some people. Even if your lender has assured you of a simultaneous
close on the two homes, uncertainty may linger.
Then, there is the
pressure to accept an unattractive offer just to ensure that the home sells in
time. If you wait to buy, you'll have the luxury of being able to negotiate
offers as they come in.
If you crave certainty,
you should probably wait until the current home sells to take on the purchase
process.
There are, however, those
who deal with uncertainty better than others. If that describes you, then
starting the purchase process before you sell your current home probably won't
faze you.
Your Finances
Regardless of your
personality, if you just don't have the money to support two mortgage payments
at the same time, then you have no choice but to sell your home before you
purchase another.
Further, if you need the
proceeds from the sale of your current home to use to buy a new home, you'll
need to wait until after you sell, or attempt a simultaneous close. (We explain
that process below.)
The Market
A seller's market is the
ideal situation when you're selling your current home, but it can be difficult
if you hope to purchase at the same time. In a seller's market—where there are
few homes available and lots of buyers competing for them—sellers are in the
driver's seat. With multiple offers coming in, homeowners are not likely to
accept an offer that is contingent upon another home selling.
On the flip side, in a
hot seller's market, homes that are in good condition and are located in decent
areas will sell quickly. If your house is among them, you take on little
risk if you wish to purchase a new home before selling your current one.
Ascertain if the current
market caters to sellers or buyers before making the decision of whether to buy
before your house sells. Your real estate agent is your best source for this
information.
Achieving the Simultaneous Close
Selling one home while
purchasing another can be a bit of a balancing act. If you try to time the
closings to occur during the same period, you run the risk of ending up with
two house payments at once.
If you allow too much
time between closings, on the other hand, you may find yourself renting a
temporary home and, thus, moving twice.
The ideal situation is to
plan for a simultaneous closing, where both transactions occur on the same day.
However, this process comes with risks, too. If anything should go wrong on the
first transaction you could end up not being able to close on the second.
For the simultaneous
closing process to go smoothly, it's important to choose the right buyers for
your current home. How much do you know about their finances? How firm is their
offer? What do you know about their motivation to purchase? How badly do they
want the home?
Since the process is a
bit like a string of dominoes, and the buyer of your home is the lead domino,
it's crucial to choose a buyer you know will consummate the deal.
The key to success is
hiring an experienced, professional real estate agent. Your agent can guide you
through the process and steer the transaction to keep it on course.
For information about home prices in your area, or to find out how much your home is worth, please contact me at 619-250-4541 or Stephen@StephenNissou.com!
Your Local San Diego Real Estate Expert,
Stephen Nissou
Nissou Realty Group | KW Realty El Cajon
619.250.4541 Direct | 619.873-2772 Office
Stephen@StephenNissou.com
www.StephenNissou.com
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