How to avoid getting stuck paying two mortgages or being homeless when you sell your house and buy another at the same time.
Not a First Time Buyer
This is not your “first rodeo” as the expression goes. After 30 years in real estate consulting, I can offer advice here that will prepare you to make the move less turbulent.
Real Estate and a Plane trip
Real Estate escrows are not much different than taking a vacation on a plane. Assuming the pilot has enough experience, your plane takes off and you fully expect to arrive at your destination on time. However, sometimes the plane hits turbulence and you hope the pilot has a plan for that.
In a perfect world, you would coordinate the closings for both properties on the same day, providing a seamless transition from your old home to the new one. But the real world tends to have turbulence when sell your house and buy another at the same time.
Buy Another House First
The fear to sell your house before you’ve purchased a new one is obvious: You’re homeless. But experts agree that this scenario is more attractive than the alternative, which is to buy another house before your current house has sold and you end up stuck with 2 mortgages.
Sell Your House First
If you sell first, you’ll be under a time deadline to find another house quickly and may end up settling for less than you wanted to buy. Since your goal is to sell your house and buy another at the same time, I will outline some solutions that I feel will best prepare you to have less turbulent escrows.
- Before you sign any contracts, I recommend you make sure there are homes available for sale that fit your home buying criteria and price range.
- Also meet with a Lender to make sure you are qualified to buy in the price range that interests you and make sure there are no derogatory mistakes on your credit report.
- If you are satisfied that homes are available that fit, then you list your home for sale and start previewing the homes that interest you.
- I believe it would be best to wait on writing an offer for another house until you have accepted an offer on your house.
You need a good plan in case you hit turbulence
After you have accepted an offer on your home, prepare to avoid a gap in the selling and buying escrow closings. I recommend you prepare for a gap between the 2 escrows, just to be safe.
- On the contract you accept to sell your house, request up to 30 days to lease back of your house after escrow closes, just in case you need it.
- You could move in temporarily with friends or family for a few days just in case.
Closing the deal
Just like you want a good and experienced pilot for your trip, you want the same in your Realtor. Nobody can promise you a ride without turbulence, but with experience is anticipation to be prepare for all the “what ifs” that can happen when you sell your house and buy another at the same time.
Recently, I created a new video about Selling a home and buying another home at the same time. I go into much more details on the video. You may view the video on my website @ https://LesEarls.com.