When selling one home and trying to buy another, it can be difficult to know which step you should take first. You don’t want to be pinned down under two separate mortgages, but you also cannot simply wait around in your current house while your Vancouver Real Estate broker sells it.
Of course, if you sell your current home before you buy another home, you may find yourself out on the streets for a few days or weeks while you look for the new place. This may lead you to staying in a hotel or renting a home. This also means you may jump quickly into a house that does not fit your needs or is out of your price range, simple because you need a place to live.
Conversely, if you buy your new home without first selling the old home, you will have to pay both mortgages until the old home is sold—that is, of course, if you can find a bank willing to extend you a second mortgage on top of the one you already have.
So, how can you safely, cheaply, and easily sell one home while buying another? There are a few steps that you must take in order to ensure that you are neither hurried out of one home, nor left holding the bill for two houses.
Gage the Vancouver Housing Market:
If you are looking for Vancouver real estate, for example, before making any other move, take a moment to assess the state of the market. Whether your markets are preferring buyers or sellers, you are going to find an advantage on either side of the situation. Knowing which, however, will help you craft an appropriate course of action.
Is it a buyer’s market?
If it easier to buy a house than it is to sell a house, you are going to have an easy time finding the right place to move in to. This will likely mean that you’ll find a house that fits your needs, at the perfect price, before a seller has made an offer on your previous house. One way to ensure that you are not simultaneously paying for two houses is to make an offer on the new house and have your realtor include a stipulation that you will only actually buy the new house once your old house has been sold. It may seem like this will be a difficult thing to get the other seller to agree to, but coming up with a few reasons why your house will sell quickly, should alleviate their concerns.
If the other seller absolutely refuses to these conditions, you should at least attempt to see if you can get some financing for the new home.
Is it a seller’s market?
In a seller’s market, you will have a much easier time selling your own home than finding a new home at a reasonable price. This means that you might end up not having a place to stay if your old home sells before you can find a new one that meets your needs and is within budget. The best way to handle a seller’s market is to start looking for and find a house before you put yours on the market.
If this is not possible, you may be able to convince your buyer to wait until you have found a new house. Many buyers, especially if they find that your house meets their needs exactly, will be willing to wait.
How to Find Financing for Two Houses:
Whether you are in a buyer’s or a seller’s market, you may end up with two houses for a short period of time. This can be financially crippling, as the weight of two mortgages may simply be too much. There are ways, however, to alleviate the financial burden. First, consult your family and friends and see if one of them might be willing to tide you over as you pay both mortgages, promising to pay it back in full once you own just a single house again.
If this is not a viable option, look into bridge loans. These are special loans offered by lenders to tide house sellers and buyers over between the time that their old house is sold and the money from the purchase becomes available for a new house. This should be a very short-term solution, as the terms for these kinds of loans are often laden with expensive fees.
The best solution, to this problem is to find a place to live temporary, either with family, or in a short-term rental. It is best to sell your old home before buying a new home, so that the money from the sale has time to come in to be used for the new purchase. Weathering this time in a rental space or with family ensures that you are not paying two mortgages or crushed with a bridge loan.