12 Step Guide to Getting Your Home SOLD!
Hello Again, Savvy Home Sellers!
Today, we have reached Step 12 of my 12 Step Guide to Getting Your Home SOLD! The final step! Last time, in Step 11, we discussed what "under contract" and closing means from a home seller's perspective.
Step 12: Buying a New Home While or After Selling Your Home
When a home owner decides to sell his or her home, it is typically to move to another home. You may be selling your home to upsize to accommodate a growing family, to downsize for retirement, or somewhere in between. If you are choosing to buy a new home rather than rent one, you will be going through the home buying process once again! You may buy a home after your current home has sold, or you may even buy a new home while still selling your current home. Either way, there are several things to consider when selling your home and buying a new home.
Buying a Home After Selling Your Current Home
The advantage of buying a home after you've already sold your current home is that you are now in a better financial position to buy a new home. The major disadvantage is that accepting an offer on your house, unless you make a request for extra days, usually you have 30 days until closing day to move out and turn the keys over to the buyer. That means you will have to quickly find a house that meets your needs and if you are financing, to have all of your mortgage paperwork completed with your bank in time to close on in the same day that you are closing on your current house or you will not have a home to live in while you search for a new home.
Searching for Your New Home While Under Contract: Whether you choose to rent a home while you're looking for a new home to buy, or you're choosing to live with family or friends, it will likely be best for you to find a new home to buy as quickly as possible right after your house is under contract. You may also add a contingency to your contract on the home you are buying this dependent on the closing of your current home.
Keep Up with the Current Market: In this buyer's market, the good-looking houses with the best value are sold quickly, so it is hard to intensively look for a home while your home is still for sale. It it likely that the houses you like may already be sold by the time you sell yours. However, you should still follow the market on the web (ask your listing agent to create a client portal website where you will receive listing alerts with information about new listings that come on the market), by previewing houses with your agent about every two to four weeks, and by attending open houses. This way you will stay informed about the houses that are available on the market that meet your needs when you are ready to buy. Once you find a home you like, you will submit an offer, go through the negotiations process, and then go through home inspections and the closing process once again.
Buying a Home While Selling Your Current Home
The advantage to buying a home while selling your current home is that you will not be rushed to look for a home that meets your needs, and you will not be without a home to live in when your current home sells, in case you aren't able to find a house you like and complete all of the paperwork in time to close at the same time that your current home sells. The major drawback to doing this is that you will own two mortgages at once, and that can be very expensive. Some options for financing the purchase of your new home can include using a home-equity line of credit, securing a bridge loan, or borrowing from your retirement.
Home Equity: One way to secure the down payment for your new home is to borrow using a home-equity line of credit. This loan will be based on the value of your current home. Keep in mind to secure the home-equity line of credit before putting your home on the market, as most banks will not issue one once your home is for sale. This is because the bank will lose money on a loan that will be paid off quickly, and you should pay off the loan as soon as your first home sells.
Bridge Loan: Also known as gap financing, a bridge loan allows a home seller to borrow money for the down payment on a new home based on the value of the equity in the current home. A bridge loan is not an easy type of financing to secure, and they are expensive. However, you may be able to avoid some of the fees associated with a bridge loan if you get it from the same bank that you are using to get the mortgage for the new home you are buying.
Borrowing from Retirement: This option should only be used as a last resort. Many employers allow employees to borrow up to 50% of the vested balance of their 401(k), or $50,000 (whichever is less). The repayment period varies depending on company rules, usually between 5 and 10 years. Use this option as a last resort because if you leave your job for any reason you will either have to immediately repay the money or you will be taxed and will have to pay a 10% penalty. If you do opt to borrow from your 401(k), it is recommended that you repay the amount as soon as your current home sells.
After you decide to sell your home, you will likely be looking to purchase a new home. Whether you buy a home while selling your current home or after your current home has sold, it is important that you understand the process of buying a new home.
Congratulations, you just completed The 12 Step Guide to Getting Your Home SOLD! You now have the tools to understand the home selling process and know what to expect from your Realtor in order to get your home SOLD! So go out there and get those homes SOLD, Savvy Home Sellers!
Until Next Time,
Ana Spradling, Your Realtor with Real Results
Whether you need help with selling your home or buying a new home, you want a Realtor who understands the home buying process and home selling process. As your listing agent, I will aggressively market your home to buyers and buyers' agents using my MBA in marketing and my extensive Internet marketing training. I will assist you in pricing your home to sell it quickly with the highest rate of return for you. Learn more about my services to home sellers and request a free in-home marketing presentation today!
As your buyer's agent, I provide free professional services to you. I will take the time to understand your needs, and I will only show you houses that meet your specific criteria. I will guide you through the process of making an offer, negotiating, and closing. Whether you need help buying a home or selling your home, contact me at (913) 954-7123 or at ASpradling@ReeceAndNichols.com.