Do you need to sell your current house in order to buy your next property? This is a question many homeowners have to consider if they’re thinking about making a move.
The reality is: it depends on what the bank is willing to offer you. Today, we’ll be running through a couple of different scenarios that explore all eventualities.
Scenario 1: you do need to sell
Scenario number one: you’ve gone to the bank to get a new pre-approval, and you’ve spoken to your banker about the budget of the home(s) you’re looking to purchase. While you do qualify for that price point, it requires you to sell your current home.
We have been using a couple of strategies lately to help our sellers give themselves enough time to find a new home. And so far, they’ve been working great for us! Feel free to reach out to our team directly to chat more about how we approach this type of situation.
Scenario 2: you don’t need to sell
Let’s say you can buy another home without having to sell your current one, but you’re not sure what type of property you’re looking for. At that point, it’s all about understanding what’s out there in your price point. Let’s start looking at properties in a certain dollar bracket and understanding whether they fit the criteria you’re looking for.
Scenario 3: the bank needs a cosigner
Sometimes, the bank gives you the greenlight to buy another home while you still own your current one, but they also require a cosigner or proof of funds in order to make it happen.
Do you have somebody that’s close to you that might be able to help you? Do you have a parent that might potentially be able to cosign your mortgage upfront? At that point, we’ll take the short
period of time between your first purchase and the closing in order to sell your property.
There’s no right or wrong answer
There are a lot of interesting things that we can do, especially in this market, in order to make sure that you have the most advantageous options available to you as a seller.
In short, you don’t necessarily need to sell your home if you qualify for what you want. You can simply wait to sell it after – no need to apply the pressure of doing it all at once.
That being said, there are always risks to holding onto a property. You can’t control the market, and if you’re expecting an exact amount for the sale of your home and it happens to take one, two, three, maybe six months for you to find that next property, it’s very possible that the market will change in the interim.
Maybe it’ll be more of a balanced market. Maybe it’ll even be a buyer’s market. So, you’ll want to make sure you have a couple of contingency plans.
Right now, the option we like most is: move forward with the sale of your home and give yourself an ample period of time to find a new home. That way, you have the cash in hand. You’re ready to go. The bank has you approved for the right amounts and you can really shoot from the hip, as we say.