Should you sell your current home before buying a new one?

On Behalf of | Jan 23, 2022 | Residential Real Estate

Homeowners who are looking to move often run into a complicated problem. If they buy a home before selling their own, then they have two mortgages. This may be unaffordable for them, even though they easily could have afforded either one of those mortgages on their own. It holds them back from getting the house that they want.

One potential solution is to sell the house that you live in before you buy the next house. But this comes with some of its own problems. If you don’t find a new house quickly, you have nowhere to live. What are some options that you could utilize?

A home sale contingency

First, you could make an offer on the new home with a contingency stating that you will purchase that house when you sell your current home. This gives you some financial protection so that you don’t have to have two mortgages at once.

You could negotiate to stay in the house

In some cases, people will sell their current home to a new owner, but they will have an agreement to rent it back until they find a new home for themselves. The new owner may like this arrangement because they get a few months’ worth of rent money that they can put into the house they just purchased. However, not all buyers are open to this because they also want to move quickly.

You could rent a different home

What a lot of people do is that they just sell their house and they end up renting another house or apartment until they find a new one to buy. It’s certainly not ideal, but it is the least complex solution in some ways.

No matter what you decide to do, make sure you understand all of the legal steps to take at this time to best protect your future interests.