Buying A New Home BEFORE You Have Sold Your Current Home

The Ronnie Cathy Matthews Group

Buying A New Home Tips

Each buyer and seller entering the real estate market enters with unique circumstances. One family may need to sell quickly to move across the country, while another couple downsizes in preparation for retirement. A most difficult situation arises when a property owner must buy a home before they put their existing home on the market. At Mathews Real Estate Team, we endeavor to prepare both buyers and sellers for the real estate experience they face with the best information available. If you find yourself Buying A New Home BEFORE You Have Sold Your Current Home, here are some things to consider.

When Buying A New Home, Be Prepared Financially

Wow! Is that an understatement? Often, unusual circumstances lead to making this decision. It will take significant preparation to make the necessary financial arrangements for the down payment and closing costs on the new home, along with making mortgage payments for two homes.

It is essential to determine how long it will be necessary to make two mortgage payments. If the delay is due to remodeling, common construction delays can become very expensive. Another factor to consider is the length of time the existing home stays on the market; we can help you determine the strength of the market in your location.

At the minimum, you should prepare for three month’s-worth of living expenses with two mortgage payments; your circumstance might require more. This decision will take due diligence, since coming up short can be disastrous for your budget. Connect with our team of experienced realtors to help you research and make a good decision.

Temporary Residence While Buying A New Home

Another option to consider is finding a temporary housing situation to shorten the period of paying two mortgages. A friend or family member may offer to give you a short-term place to stay. You might also consider a short-term rental to avoid multi-mortgage payments. These alternative steps demonstrate some critical thought. Here are a few considerations to help with these decisions:

Interim stays with friends or family are more stressful for both parties than either one of you imagine. Both parties will need to be extremely gracious.
If you opt for a short-term rental, it is the equivalent of 2 moves; this can create additional family stress. Make sure you prepare your family as best you can.
Short-term rentals are hard to find and generally, are not designed for this purpose. When you include utility connection fees and rental security deposits, even a small apartment can cost more than the mortgage you seek to avoid.
Consult with your lender. A mortgage and rental fees may interfere with your financial viability compared to two mortgages.

Be Careful with Remodeling

The ideal situation is to make changes before move-in day and have everything “move-in ready.” However, weather, material availability, and sub-contractor schedules are all potential reasons for delay that will be beyond your control and very costly. Evaluate the contractor’s estimate and figure his estimated completion date is optimistic. Consider how much construction is required and how much is desired. Determine whether you can live with some construction mess after you move in. You may trade one stress for another but save significantly in the end.