There are several things to consider when you’re selling your current home and preparing to buy another. However, once you’ve established the best plan for you and your budget, you’ll be able to balance things and enjoy your next new home! Consider these five items and then give us a call at 800.500.6328 or email us at [email protected] so we can help you achieve a Mission Fed Moment by moving up to your next home.
- Take a close look at the housing market
Before you do anything official, look at the housing market in the area in which you currently live, as well as in the area to which you plan to move. Is the market hot, or is it a slower market? Work with your real estate agent to get a solid understanding of what comparable homes are selling for in either area. This way, you’ll set a realistic asking price for your current home and will be informed on what to offer on a new home. Since you’re both a buyer and a seller in this case, you’ll want to keep in mind how the market will affect your sale, purchase and down payment.
- Buy first or sell first?
The answer depends on the market and on your financial situation. If the market is slower, you’ll have an easier time finding a home you like at a reasonable price, but you may have a hard time selling your current home. Alternately, if the market is hot, you might sell your home quickly, but find it more difficult to find a new home you like for a price you can afford. Consult with a team of real estate experts like a real estate agent and mortgage loan representative.
- Buying first
Buying first is certainly easier, as you’ll have more time to move and prepare your current house to sell. However, in a slower market, it’s often advisable to make the purchase of a new home contingent on the sale of your current home—in fact, your mortgage may require it. It can be difficult to get a mortgage for a new home without having sold your old home. Otherwise, you may end up owning two houses, which includes carrying two mortgages, two homeowner’s insurance policies and two houses’ worth of maintenance costs, which increases the risk that you’ll be unable to make your payments to your lender. Owning two homes simultaneously also means you either have to worry about leaving one house unoccupied, or you have to manage renters.
- Selling first
Similarly, in a hot market, you can make the sale of your current home contingent upon your purchase of a new home, or you could end up having sold your home without a home to move into! On the other hand, you’ll be clear on exactly how much money you’ll have to work with when purchasing your new home. You may choose to sell your home anyway and live in temporary housing (like a short-term apartment lease or staying with family) until you can buy your new home. With careful planning, you can also choose to end up in the situation described above—owning two homes at once for a limited time.
- Synchronize closing dates
If you’re able to sell your home and buy a new one all in perfectly timed order, proper planning beforehand should help you organize the closing dates appropriately. Preferably, your closing date on your new home should come before the closing date on your old home so you have plenty of time to move out and address any issues in both your old home and your new home in a timely manner.
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The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. References to any specific commercial products, processes, or services, or the use of any trade, firm, or corporation name in this article by Mission Federal Credit Union is for the information and convenience of its readers and does not constitute endorsement, control or warranty by Mission Federal Credit Union.