How to Buy a Home When You Haven’t Sold Yours Yet
Many buyers are simultaneously trying to sell their current homes. Buying before selling does come with several risks, but you can mitigate them significantly by capitalizing on a major advantage of your situation: time.
If you sold first, your home buying process would be on a tight deadline because you’d need to find somewhere to live after the sale.
Buying first removes the pressure of a looming sale, so you can take your time, find the right home, and gather the resources to resolve any financial dilemmas.
Here’s how to go about buying a home when you haven’t sold yours yet:
Get Preapproved for a Mortgage
Yes, this is the same first step for buying a home in general. Before you start looking at houses, get preapproved for a mortgage. Since time is on your side, compare interest rates and other fees by getting quotes at several mortgage lenders, not just one.
Getting preapproved (rather than just pre-qualified) gives you a clear picture of how much you can spend on a home. This information is extremely helpful because you’re certainly not in a position to overspend – and it can be done on the contingency of selling your current home.
Work with an Experienced Real Estate Agent
When buying or selling a home, it’s not uncommon to interview multiple agents before finding someone you can trust. In this case, what you’re really looking for is previous experience with buying and selling simultaneously. This person will have a proven step-by-step process for handling this situation, such as a timeline in which different actions should be completed.
When the agent gives you advice, you’ll know it’s coming from firsthand experience, and they’re doing what has worked for them in the past.
Research the Local Market
The state of the real estate market plays a huge role in your buying and selling strategy. Even though it’s your agent’s job to educate you about the current market, it doesn’t hurt to do some basic research yourself. You feel helpless when you don’t know what you’re getting into.
Specifically, research what your desired neighborhood’s market currently looks like in addition to what your current neighborhood looks like. Some key points to look up include:
- How much inventory is available?
- How much time are homes spending on the market?
- Are homes like yours selling above or below asking price?
This information can give you an idea of how much time a certain step will take and which tasks you should focus on first. It can also provide a realistic picture of the kind of financing you’ll need to have on-hand to make an offer.
Look at Key Contract Stipulations Like Lease-Backs
Unless you’re able to purchase your new home with cash, before you sell your current home, you’ll need to look at options to cover the gap between closing on your current home and closing on your next home.
Often, a good option is working in a lease-back on your current home for after closing. This way, you’ll still be able to close on your home on schedule, then lease it back from the new buyer for a pre-approved amount of time which gives you extra time to find your new home, get it under contract, and then close.
The Kern Team has helped dozens of families find the right homes for their needs while simultaneously (or eventually) selling their current home. We’re happy to walk you through each step of this journey and offer the best possible strategy for a smooth buying and selling process. Get in touch and we’ll show you what that might look like.
