More than 71 percent of home sellers look at homes for sale while their current home is on the market, according to a 2017 Zillow report. Looking back, 24 percent of them said they wished they would have started the selling process earlier.
Most of these home sellers ran up against a common problem on what to be doing first: Buying or selling your Pittsburg CA home first?
Let’s take a look at just some of what you should consider and a couple of solutions.
Current Market Conditions
In a seller’s market (when there are lots of buyers looking for homes but few homes available) you’ll most likely not have to worry about the home selling. But, once it does, you’ll be joining the ranks of all the other buyers, competing against one another for the few homes on the market.
For this reason, many Pittsburg CA home sellers choose to rent for a time after selling, until the market changes in their favor.
Others can’t stand the thought of having to pack up and move yet again. Determine your tolerance for this scenario.
Finances
If you don’t have a large cash reserve, you’ll need the equity in your current home to purchase your new one. This means you’ll have to be either selling your Pittsburg CA home before buying or choose from among the other options we outline below.
The Two-House Payments Conundrum
Another major concern we hear from our listing clients is that they’re afraid that if one side of the deal concludes before the other, they’ll be faced with having to make two house payments. Having to be buying and selling your Pittsburg CA home at the same is madness, right?
But if your budget can tolerate this eventuality, then you’ve nothing to worry about. If not, read on.
Solutions to Consider
Luckily, you have several remedies to choose from when faced with the “should you be buying or selling your Pittsburg CA home first” question.
Bridge Loan
A bridge loan is a short-term loan that provides instant cash flow. They’re typically only provided to borrowers with high credit scores and low debt-to-income ratios.
Learn more about bridge loans at Investopedia.com.
Thinking of Selling Your Pittsburg CA Home? Click Here for a free consultation.
HELOC
The Home Equity Line of Credit, or HELOC for short, offers a way for you to get at all that equity you’ve built up in your current home. This is money you can use to buy the new home and then you will pay off the HELOC with the proceeds from the sale of the current home.
There are several disadvantages to using a HELOC to come up with the money for your next home. Speak with your lender and financial advisor about this option.
Borrow Against Your 401(k)
Ask financial experts if borrowing money from your 401(k) to come up with the cash for your new home is a good idea and you’ll get one of two answers: “Sure” or “No way!”
The latter camp includes pros who remind you about the fact that you’ll be losing the compounding benefits of your invested money. The former group will tell you to go for it because real estate is an amazing investment and, besides, you can pay yourself back.
Again, please speak with your financial planner before deciding on this option.
Negotiate With the Buyer
It’s always worth it to attempt negotiating certain contract terms with the buyer of your current home.
Ask the buyer for a longer escrow, such as 90 days, to give you time to house hunt for the next home. You might also ask the buyer to consider renting your home back to you after the sale closes. Offer a healthy security deposit and agree to pay above-market rent to cover their mortgage payments, if necessary.
There are disadvantages to the rent-back scenario, so run this idea by your attorney.
Simultaneous Close
Although it is often challenging, a simultaneous close is a common way of dealing with buying/selling your Pittsburg CA home. This type of transaction times the close of both transactions (the sale of your current home and the purchase of the next home) to occur simultaneously.
Yes, there are dangers in this option, especially in the hands of an inexperienced real estate agent.
Whether buying or selling your Pittsburg CA home first is a common dilemma and both have their pluses and minuses. We’re happy to discuss this with you in more detail; feel free to contact us.
Would you like assistance selling your Pittsburg CA home for Top Dollar? Send us an e-mail at info@Thompson-RealtyGroup.com or Click Here to Contact Us and we will contact you for a free consultation. Or, if you prefer, you can call us at 925-754-1611
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