In this current market I think it is advisable to try to sell your house first before you offer on one to buy. But...
It's a buyers' market right now. There have been houses for sale in many neighborhoods for months now. Yours is a super place and if priced and marketed properly, I'm sure will sell in a reasonable period of time. Today, that means 2-3 months.
We could offer and put a contingency in the offer that your current home must sell before you can purchase. That way you are not tied with two mortgage payments.
Problem is that most Sellers may not accept the offer structured this way.
What we could do further, is to put in a clause in the contract called a "first right of refusal." What this means is that the sellers have the right to continue to advertise and show the home to prospective buyers, but if they get another offer you will have the option to either go ahead and purchase the property or let it go. Within a predetermined period of time (say 2-5 days).
There are no real rules on this subject, it is a juggling match.
Controversy and debate always surround this question!
Apparently, people who are faced with this question think that they should first find their next house and put it securely under contract. There is and are good grounds for this choice, although it is often the least prudent option of the two choices that are available.
By first finding your new home, you will:
- Know how much money (or equity) you will need to take out of your existing house in order to afford the new one.
- Know when you will need to finalize the sale of your current house in order to move into the new one.
- Know that you will have somewhere to live when you move out of your existing house.
Although the logic behind these reasons is more than sound, most people who are experienced in "moving up" or upgrading to another house will argue that it makes more financial sense to list your house first, and then begin the house Buying process.
Another option, is the financing way. If you have the equity in your home, you take out an equity loan (short term) to carry the equity towards the new purchase for down payment or closing cost coverage.
A reputable lender may be a source of advice here. The credit markets have changed and tightened (daily) that some of these options have gotten very limited. Although the benefit of this tightening of credit, has lowered mortgage rates - making it the time to get these loans. But even that seems to change every few days.
I guess this is a GUIDE BOOK of sorts. I am just trying to give you the options and the pro's and con's of buying a home before you sell your present residence.
'Til next time....