Congratulations on purchasing a new construction home! But, before you move you need to sell your current house. Coordinating selling your house with buying can be stressful! However, with a little planning and by following our tips below both transactions can run smoothly.
When it comes to buying and selling a home, there’s a lot of moving parts. To make it easier, don’t do it alone! Get help from experts, such as a real estate agent who has experience with newly constructed homes. Real estate agents will help you with all the paperwork, facilitate negotiations between you and potential buyers, and help you price your current home so you can determine how much equity you have to use toward your new construction home. When you hire an expert, coordinating selling your house with buying will be much simpler!
Factor in Market Conditions
Are you in a buyers market or a sellers market? You need to have a good understanding of the housing market in your area so you can thoroughly strategize. The best action plan depends on who has the power – buyer or seller. For example, in a buyers market, it could take longer to sell your home, but it’s easier to add contingencies that give you peace of mind. In a seller’s market, you’ll have less flexibility to include contingencies or bump out the closing date. But, your home should sell faster, allowing you to move into your new construction home without needing to cover two mortgages.
Consider the Closing Process
The goal is to get the buyer of your home to close on the date your new construction home will be ready. However, even the best-laid plans can go awry. Prepare for this by sitting down with your real estate agent and your bank to determine how long you can afford to pay two mortgages. Talk to them about what contingencies you should add when selling your house. For example, you can set up a financing contingency in case your new mortgage approval depends on selling your current house.
Have a Backup Plan
Selling first makes getting a mortgage easier, but it also means you’ll need to find a temporary place to live if the new home build is delayed. Part of your backup plan should include finding a few short-term rental options nearby. You should also talk to your bank about a bridge loan. This type of loan acts as a short-term loan that is repaid once the sale of your original house goes through. You can also discuss entering a rent-back agreement with potential buyers. This is where you negotiate staying in your current home for a maximum of 60 to 90 days – typically in exchange for a reduced selling price or by paying rent to the buyers.
Coordinating selling your house with buying is not an easy task. Still, when you enlist the help of experts and plan accordingly, it’ll be a lot smoother. We hope following the above tips help you move into your beautiful, new construction home without issue. For more helpful real estate tips, visit our blog.