If you are looking to move into a new home, you likely want to also sell your current home so that you no longer own it and can get paid for giving it up.
It can be a big undertaking trying to manage both big transactions at a time. Granted, it is very rare for homeowners to finalize buying and selling their home literally on the same day, so you might feel like finalizing one deal before working on the other.
Here are some strategies for how to buy a new home while selling your current one.
Home Sale Contingency
Of all Irvine homes for sale, maybe you’ve found the perfect home you want to move in that you don’t want getting away. While securing the home you want is something that many homeowners try to do, there can be many financial hurdles considering that you have yet to sell your current home in order to afford a new one.
A home sale contingency is a policy in a contract that you can add, but also the seller needs to approve of. What a home sale contingency does in this scenario is allow you a period of time to find somebody to buy your current house before you pay the seller. If a buyer doesn’t buy your home after the contingency expires, you can either extend the duration of the contingency or cancel the deal.
For homeowners who don’t have the money to buy a new home first, they can take out a bridge loan. A bridge loan is a short-term loan that would allow you to pay your mortgage off on your current home so that it doesn’t carry over. This allows the transition from moving into your home much easier.
Bridge loans make it possible for homeowners to move into a new home if they still have to pay off mortgages from their current home. The debt that comes with this loan isn’t much of an issue, either, considering that you can pay it off once your old home sells.
Set the Settlement Date in Your Favor
Selling your current home first is more ideal for homeowners, as homeowners get paid for their home first and can better determine what they can afford for a new dwelling. The drawback to doing this, however, is that you have to move out of your home into a temporary place to stay before moving into a new permanent home. This means you’ll be moving more than once.
So that you can move right into your new home, try to set the settlement date on the same day that you are closing the deal on your old home.
However, in order to be courteous with the other parties in your deals, you may want to be flexible in other parts of your contract so that you are more likely to have the settlement date you want.
Rent Back Contingency
A rent back contingency is essentially the ability to rent your home back from the buyer so you can continue to live in your old home until you are ready to move. This is great for when you cannot find another place to stay, however, this would be a move done at the expense of the new homeowner.
You are basically asking the new owner a favor with a rent back contingency, and unless the new owner wants to be paid back some of the money, they used to buy the house, they do not have to agree to go through with it. But, there’s no harm in working something out.