Moving between homes happens- whether you’re expanding to a bigger home, or downsizing to the cottage you always wanted, one day you will probably sell and buy at approximately the same time.
When you do, you’ll find yourself with 4 main goals:
Get the highest price possible for the home you’re selling
Get the lowest price possible for the home you’re buying
Have somewhere to live the whole time
Make it as smooth as possible
Ideally, timing wise, you’ll want move from one residence to the other fairly seamlessly. Yet this isn’t always easy to pull off.
Rent Back Before Moving Homes
If you sell first, you may be able to rent-back from the new owner, then buy and move. This means staying in your home while paying the new owner rent. It’s one of the most seamless, no-stress options.
However, you may rent elsewhere while you look, especially if the new owner isn’t interested in renting back to you. This can mean at least two moves and two packing and unpacking efforts, and perhaps signing a lease. This is the best option if you expect it to take a long while to decide on a new home.
Being a Guest
Alternatively, you could stay in a hotel (or with family) and put your furniture in storage. This can be costly, emotionally as well as financially. This can still be the best option though, especially if you expect to move into your new home soon.
Use a Long Settlement Period
One way to avoid additional moves is to request a lengthy settlement period for your selling transaction, to allow you ample time to find and move into a new property.
Just Buy It
If your finances support it, you can buy a new home before selling your current home. There will be a period of time you may be paying mortgages on two homes, until the first one sells. And you may feel a disadvantage not knowing how much your current home will sell for. Especially if this would affect how much you’d like to spend. But his does eliminate all concerns about where you should live or store your things.
Or you can buy first using a bridging loan, with the contingency that your home then sells. This can be problematic if you overestimate what your home is going to sell for, or underestimate how long it will take. Be realistic or even conservative with your expectations and a bridging loan can meet your needs.
Deposit bonds are another tool to make the home switching process easier. Before selling, you can deposit on a new property with a deposit bond. The issuers of the bond guarantee that they will pay the deposit amount to the seller if you default and don’t purchase the property. This means you could still lose your deposit, just as if you had paid cash, but you’ll owe that money to the bond issuer, not the seller.
Contact Us for Help
There are many ways to manage the timing of concurrent buying and selling efforts. If this is something you’ll need to do, you’re not on your own. The Laura Wucher team is always here to help you. Contact us any time with your home buying and selling questions.