There are pluses and minuses to both decisions, regardless of which one you choose. Therefore, let’s examine all off the possible consequences to buying a new home or selling first:
Pluses:
- Being able to snag a home when you see one you want.
- Fewer moving hassles and no storage fees.
- Easier selling process.
- Cash offers give you a firm competitive advantage.
- You might be able to avoid some capital gains taxes.
- Relieves the stress of living in your home while trying to sell it.
Minuses:
- You might need to juggle 2 mortgages for a while, but in a seller’s market which we are in now, this may not be much of a problem.
- Selling and buying on the same day may cause some unexpected problems, such as financing delays or schedule changes.
- You might need to borrow from your retirement savings for the down payment.
It would appear that the advantages far outweigh the cons in this scenario. But what are the options that allow for buying before selling?
Firstly, you could make a contingency offer allowing you to back out of the offer if you fail to sell your home on time. This is a definite “no-go” in today’s market where homes are being snatched up in fewer than a week in most cases.
Secondly, Buyers who use the equity tied up in their present home allows them to make an attractive cash offer and have a competitive advantage during these fierce bidding wars.
A simple solution to buying before selling is our popular Bridge Loan program. Using the equity in your present home to obtain enough money to make your down payment, allows you to quickly seal the deal on your new home. Sun Pacific Mortgage has been offering this program for owner-occupied and investment properties for 34 years in California. If you need fast money to secure your dream home, give us a call at 707-523-2099. Lately, we have saved many homebuyers from losing their sought-after dream home by providing the funds for them to purchase before selling.