Factors to Consider when Buying a New House before Selling your Current House
Getting through the process of deciding whether to sell off your current house before buying a new house, and completing all the processes involved, or simply buying that perfect house you have always wanted and then putting the old house up for sale could be very difficult, especially when considering all the factors you first have to take into account before reaching a decision. Certain factors to think about include:
- The Present Condition of the Local Property Market: You have to make up your mind on the criteria for the new house you wish to buy. Carry out research on the style of the house, the neighborhood you want to buy in, the price range you are hoping to get the house in, the surface layout of the house, and other important criteria. You also have to do proper research on the availability of houses in your criteria by consulting with estate agents that can help you in your research.
- Your Financial Alternative: Considering an alternative or a plan B in anything you decide to do, whether selling or buying, is very important, because it helps you avoid frustrating situations. If you decide to buy a house first, you should set up an alternative source of income for the mortgage payment for both the new and the old house, in case you are unable to sell off your current house immediately after purchasing a new one. However, if you then decide to sell off your current house before buying a new one, then you should make an alternative plan so you will have a place to stay for a few weeks, or even months, while you go through the necessary process of finding a new house.
- Your Emotional Readiness: You may have to consider your emotional readiness about the whole affair for any possible outcome that may arise.
Selling your current house before buying a new one may be a good idea in some cases, and a lot of people have different goals they aim to achieve when they decide to sell their current houses first. These goals may include:
- To buy a new house at a cheaper price with the money obtained from their current house.
- To go through the process of selling off their current house with little to no effort, which is why several people indulge agents that can easily help them.
- To sell off the current house at a very reasonable sum, which will be convenient for them in the process of buying a new house.
The first step to successfully selling your current house at a very profitable rate is to improve the appearance of the house both inside and outside. This means that you have to make the effort of putting the house in order, make repairs where necessary, and repaint if you must, in order to attract bidders that will actually pay. You can also consider selling the house to cash buyers.
Benefits of Selling Your Current House First, Before Buying a New One
- Most of the time, sellers of a house tend to accept offers from people with cash in the bank, or at least a preapproved mortgage, which can give you an upper hand in getting the perfect house you want, as you won’t be dependent on the sale of your current house before you are able to make payments. Most people do not like to be involved in the housing chain.
- Being swindled is less likely to occur, since a very good offer on your terms is unlikely to be rejected by a seller, especially a desperate one.
- Being under financial pressure to sell your current house quickly and accept a lower value than you expected is unlikely, since you haven’t committed to another purchase which you need funds for. You get to take advantage of being in control of the sale, determining how low or high you want to sell.
- Since you are likely to still have enough time to decide on the sale, you are in a better position to negotiate the prices you want, unlike when you seem to be in a hurry to sell the property due to some mortgage expenses that are increasing by the day.
- Considering the fact that your current house is already sold and you already know the amount of cash you have in the bank, you will be sure of exactly how much you are likely to spend, unlike when you are just depending on acquiring a particular amount on the sale of your current house in order to pay for the new one.
- If, by any chance, the price of estate properties like houses start falling at the time you are ready to buy a new house, you will most likely get a new home at a far cheaper rate than you sold your old house.
- Selling your current house first, before buying a new house, gives you the advantage of qualifying for a bridge loan for transitioning homeowners, since you already have an excellent credit and your current house has a reasonable amount of equity.
- Selling your current house first gives you the advantage of getting the most suitable price without any form of stress, but buying a house first may force you to accept less than the price you expect from your current house in order to qualify for the mortgage of the new house.
- Selling your current house first gives you the opportunity to put your next house under contract as you still have time to find a buyer for your current house.
- Buying a house first has no way of putting you in a frustrating situation or a rushed state where you may be forced to settle with a less perfect house so that you will have a place to live, or because your friend is tired of you crashing in his living room, or for any other reason. Buying a new house first gives you all the time you need to find that perfect house in the right neighborhood that you love.
Disadvantages of Selling your Current House before Buying a New House
- If, by any chance, buying a new house immediately after selling off your current house takes longer than you expect due to the fact that you can’t view the right property that you are interested in buying, you may end up having to rent a house first, which could increase the cost of getting a new house.
- The prices of houses may be increasing at the time you sell your current house and become ready to buy a new house. This means that buying that new house is very likely to be more costly. A new house that exceeds your set budget is not the ideal situation you want to find yourself in.
- If the property market is hot at the time you are ready to sell your current house, an offer that will be under contract for the sale of your present house may not be a good market for most people.
- Buying a new house before selling your current house may put you at risk of having to pay for a mortgage for both the new and the old house. This may not look good, especially if you do not have enough money to cover the expenses the houses may incur.
Tips on How to Sell Your Current House Successfully, as Well as Buying that Perfect House
- Forge a very good relationship with as many estate agents as possible before venturing into selling your current house. This is to ensure you have an upper hand when it comes to getting the list of the most available properties when they come onto the market. It makes it easy for you to get the perfect house you want, and within a short period of time.
- Do thorough research of the type of house you want to buy and the area in which you want to own a home before going through the process of selling your current house.
- Making all the proper arrangements for a new house is advisable before selling off your current house, to ensure that you do not get stranded through the process of buying a new house, or end up renting a house, which could prove to be very expensive.
- Getting the perfect house you want after selling your current house may not be as easy as you think. So while you underway with the task of selling your current house, ensure to keep your eye on the property market just in case that dream house comes along.
- If you have not seen a prospective new house to buy, you can simply do yourself the favor of extending the selling process of your current house between agreeing on a particular price and exchanging, and between exchanging and completion of the whole deal.
- Make yourself more attractive to a seller by ensuring that the mortgage of your current house has been approved. It gives you the upper hand, and makes it easier to buy the new house of your choice.