Moving Up: Buy First or Sell First?
Many people are looking at real estate prices and thinking it’s a great time to buy a bigger or better home, or to move to their ideal location. And they are right. The problem is – they may need to sell their existing home first to complete their down payment (or avoid paying two mortgages), and this sometimes can be a challenge.
It is important that you sit down with your REALTOR® and explore all the options available to you. Here are some of them:
- Buy first, sell later.
Advantages: You can take advantage of current buying opportunities and low interest rates. Disadvantages: You may not qualify for both loans, and if you do, you may have to pay two mortgages until your old home sells. You may also explore the availability of a “bridge” loan from your lender to help you make the transition.
- Sell first, buy later.
Advantages: This is the “safest” option, you only have one mortgage at a time, you have no uncertainties. Disadvantages: It may take a while to sell your current home and you may miss out on buying market opportunities (i.e. "opportunistic bargains") and maybe low interest rates.
- Buy first, conditional upon the sale of your existing home. Advantages: This poses little risk to you, if you don’t sell , you can get out of the purchase contract and get your earnest money back. Disadvantages: Many sellers may be reluctant to accept such a contingency, given that it takes their home off the market for an uncertain period of time, with no guarantee of a sale. If they accept this condition, they will probably demand the home be listed with a professional agent, priced right, and may also give you a deadline to sell your home. It may be very frustrating if you really like the new home but you cannot sell your current home on time.
Wish to get a better home? Call The Alan Donald Real Estate Team today on 843-900-0155. We get it done!