If you have plenty of money in your bank account, selling one home and buying the next one isn’t a stressful proposition. For someone with limited funds, however, trying to juggle the selling of one home and the purchase of another can be a nightmare.
If you need the escrow from your current home to buy your next home, you have a few options that won’t make you homeless in the process.
You Need to Sell Your Home First to Get Money to Buy Your Next Home
This is the case for many buyers. You need the money from the sale of your current home to fund the purchase of your new home. Ideally, you will find a rental with flexible terms and live in that while you stage and sell your current home. Once the house sells, you can use the money to fund the purchase of your next home and move out of the rental in a couple of months.
If you’re moving to a new city, you’re going to need every penny of that home equity to make the move. You could try to find a buyer that’s willing to wait for you to move or who will rent your home back to you after the sale until you find a place in your new city.
Alternatively, you could rent a cheap place in your new city until you find a home to buy.
You Need to Buy a New Home Before Your Old Home Sells
Many people worry about having to pay two mortgages, which can be financially draining. The good news is, there are a couple of ways to lessen this financial drain.
You can use a slow market to your advantage in this situation. Get your home ready for sale and put an offer on the home you want to buy. Make a contingency offer with the seller that allows you to sell your home first before closing on your new home. This will make it that you don’t have to pay two mortgages for very long, if at all. Put your home on the market as soon as the seller accepts your offer.
If you have enough resources to put a down payment on a new home before your old home has sold, go ahead and put an offer on a new home. Once you close, move into your new home and put your old home up for sale. Be sure to replenish the resources you depleted with the escrow you gain from the sale.
Unless you have a lot of savings in the bank, there really is no ideal way to sell your current home and buy a new one at the same time. By following the advice listed above, however, you can minimize the financial drain as you sell one property and buy the next.