In real estate, knowing how to buy a house before selling your current house can open up a lot of possibilities. While there are always pros and cons to every housing transaction, there may be benefits to making an offer or buying a home before yours has sold.
The DC metro area is a hot market. This means you’ll need to make a competitive offer to stay in the running. From getting your house ready to sell to different loan options, we’ll go over how to buy a house when you haven’t sold yours.
Here’s a round-up of everything you need to know about selling and buying a home at the same time.
Get Your DC Area Home Ready to Sell
Before you start your house hunt, you need to make sure your house is ready to hit the market. Getting your home ready to sell can help you get a jump on your move. Ideally, you want your home to sell as quickly as possible.
The faster your home sells, the faster you’ll be able to purchase your next home. With a little prep work, you can help your home show better to potential buyers.
Buyers want to see clean and neutral spaces. Decluttering and giving your home a good cleaning will go a long way.
A fresh coat of neutral paint will also help freshen up your home and make it look larger.
Taking your budget into consideration, you may also want to do some small updates. Think about sprucing up your kitchen, freshening bathrooms, or staging rooms to sell.
Remember the better your home shows, the faster it will sell.
Assess Your Finances
Before you start any house hunting, make sure your finances are in order. From your budget to your down payment, it’s essential to know how much you can afford.
If you’re trying to buy a house before selling your own, you need to consider if this is possible within your budget. Think about how long you can afford two mortgages and if you can make a down payment before you sell.
You’ll also want to know what your budget is for your new home. Look at your income and all of your expenses to find a monthly payment you’re comfortable with.
If you aren’t sure if you can afford to do this, your lender and your realtor can work with you on a plan. Your lender may have some options for financing that allows you to own both homes at the same time, even just for a short time.
Start Your House Hunt in the DC Metro Area
When you’re looking to move quickly, start researching homes and suburbs. Whether you’re looking near DC, Northern Virginia or Maryland, the more research you do, the sooner you can narrow down your search radius.
Speak with a real estate agent about your wish list, your budget, and where you’re hoping to move. They can help you tour the homes you’re interested in and will work with you on getting your current house sold.
When you’re having trouble selling your house, your agent can help you come up with a pricing strategy. You may need to include a later closing date or a contingency in the offer on your new home.
Often times, you’ll get a contract for your current home before you find a new one. If you haven’t found a new house yet, don’t panic. You can push your closing date out to give you more time to look.
Talk to Your Lender
When considering the question, can I buy another house before I sell mine? Your lender will typically be able to help you with the answer.
If you have the budget, you might be able to afford both homes for a short period of time. If this isn’t feasible, consider a bridge loan.
A bridge loan is made for people who are trying to buy one home and sell another at the same time. Essentially, you will get a short-term loan that will help you pay for your new down payment.
Once your old home sells, you can use that money to pay off your loan. Keep in mind that a bridge loan may be more expensive than a traditional mortgage. This is because it is a very short-term loan.
You’ll need to qualify for the loan and make sure you can cover both mortgage payments until your home sells. Consider your budget and how much equity you have in your house.
Coordinate Your Closing Dates or Contingencies
If financing or a bridge loan isn’t an option, you may still be able to make an offer on your new home using a contingency. A contingency will state that you need to sell your current home before you close on the new one.
In this situation, you won’t close on your new house until your other home has sold. You and your realtor can coordinate your closing dates to make this happen. You may close on your current home in the morning and then purchase your new home in the afternoon.
Coordinating closing dates can help make buying and selling a reality.
How to Buy a House Before Selling Your Current House
Knowing how to buy a house before selling your current house can be a daunting question to answer. Luckily, there are a few options available to help make this happen.
While it’s probably ideal to get your current residence sold first, it doesn’t always work out this way.
Before you begin, take some time to get your house ready to sell. Make sure your finances are in order as well. Having a handle on your finances will also help you better understand what your options are for buying and selling at the same time.
If you’re ready to get your house hunt underway, fill out the contact form here to get in touch with a DC area real estate professional.
