Are you looking to become a homeowner in Fresno real estate? Selling your current house before purchasing a new one is the best option for most owners. You can sell your home after closing a new one or complete both transactions simultaneously. The odds of everything lining up in simultaneous transactions are low and may present various challenges. Here’s an overview of the merits and drawbacks of selling your house before buying a new one:
Why Sell Your House Before Buying a New One
Selling your home before purchasing a new one is the more practical and convenient approach for most people. If you need access to your current home’s equity, selling first might be your only option. The solution makes more sense when selling in a buyer’s market. Here are four reasons why you should sell your current house before buying a new one:
1. Avoid Rushed Sales
Buying before selling the current house may push you into making a rush sale to avoid paying two mortgages. Selling first gives you more time to find a suitable buyer and the right price for your equity. You won’t have the added pressure of knowing you have already purchased another property.
2. Determine Your Sales Profit
Selling a house before you purchase a new one can give you an accurate determination of your sales profit. You’ll have the actual cash from your sale and can use it to buy the new home. Buying the new house before selling makes estimating earnings from the old house challenging. Sellers may make concessions, and you might get less cash after closing.
3. Stronger Purchase Offer
Homeowners selling their current home at the same time as buying a new one create a property chain. If you’re purchasing a new home in a seller’s market, an offer contingent upon selling the old house makes you less competitive and desirable. Selling first allows you to make a stronger purchase offer more desirable to sellers.
4. Pay One Mortgage
Buying before selling the old house implies paying two mortgages, which can cause financial strain. Even if you have the finances to cover payments for both houses, having an existing mortgage affects your debt-to-income ratio. Your monthly payments are factored into determining how much mortgage you qualify for.
Potential Drawbacks of Selling Before Buying
It may not be convenient for everyone to sell their home before buying a new one. Listing and showing the home you currently live in can be overwhelming. Purchasing and closing on the next home within the closing window of your current home present logistical challenges. Here are the key drawbacks of selling before buying:
1. Rushed Home Purchase
Homeowners who list their current homes for sale have a short window to find their next residence. You might feel pressured to purchase before the sale of your current home closes. The alternative is finding temporary housing if you sell the house before closing on the next purchase. Temporary housing will cost you money and reduce your new home budget.
2. You May Need to Move Twice
If you sell your current home before buying a new one, you’ll need to find a place to stay. You can live with friends or family or rent short-term housing as you close your new home. Moving twice is inconvenient and will cost more than a single move. Your belongings are at a higher risk of damage, and your temporary housing may not sufficiently hold everything.
How to Offset the Potential Drawbacks
Homeowners determined to sell their current home before buying a new one have various ways to offset the potential drawbacks. One standard recommendation is to request a lease-back as part of closing. A lease-back allows you to lease the property for a few months. If the new buyer agrees to this clause, you don’t need to move to a temporary house. You can live in your old home until you buy the next.
Selling before buying requires extensive organization and research. Determine where you want to buy a home and get your mortgage pre-approved early to become more attractive to sellers. You can use online estate agents while keeping an eye on the property market to identify the best new offers.
Slowing down the selling process gives you more time to find and close on new homes. Selling before buying a new home doesn’t suit everyone. If you want to avoid rushed purchases, secure your dream home, and control your moving timeline, buying before selling is more sensible. You should compare the pros and cons of each option and choose one that suits your finances and goals. Make sure you involve a reputable real estate agent for pro insights.
Fresno Real Estate Homes
The Fresno real estate market thrives and offers exceptional homes for new owners and attractive deals for sellers. Listing with reputable agents can get your home to a new buyer in a matter of days, giving you time to find new properties to purchase. Selling your current home and buying a new one is a common real estate conundrum. Using a reliable agent can reduce the effort and simplify the process while protecting your interests.
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