Hiccup Free Homebuying

If you like walking a tightrope then buying and selling a house at the same time in today’s market probably sounds like a blast. If you’re a normal person then you’re likely experiencing trepidation, stress, and minor (or major) frustrations. What if you sell your home right away but every offer you make on your next home gets outbid? Today’s high-price, high-interest market is a doozy so here are some things to consider for seamless simultaneous transactions. (Say that ten times fast.)

Which Comes First?

There are decided pros and cons that come with buying a new place versus listing your place first. Buying first gives you the chance to go ahead and get settled AND you don’t have to worry about living in a museum while it’s on the market. On the flipside, selling first, especially with today’s increased equity, will give you a clear answer on any profits you’ll have and what your actual budget might be. 

However, if you sell first and don’t secure your dream home immediately, you have to consider the possibility of a short term rental while you’re shopping. This means multiple moves and the extra costs associated with that. 

When making up your might, ask yourself three things: 

• Am I willing to have my day-to-day disrupted while living in a home actively for sale?
• In what area am I hoping to move?
• If I buy first and don’t sell right away, can I afford 2 mortgages at once?

Equity

Remember that equity we just talked about? Chances are, if you’ve owned your home for three or more years, you’ve likely built some equity. Home prices have appreciated so much over the past few years that odds are high you’re due for some profit. If this is your case, you might consider a bridge loan. 

Bridge loans allow for short-term use of equity from your current property before you’ve even sold it to serve as a down payment for the next property. Interest rates on bridge loans are oftentimes a lot higher than average mortgage interest rates. This is because the idea is that you’ll pay them off very quickly with the sale of your property. Expect rates anywhere from 6 to 16%.