Here are some options if haven’t sold your current home and you’ve found a new one.
The perfect house – you’ve found it! It’s got the features you want in the location you desire and at the right price. Isn’t this the happy ending every home-buyer wants? Not if you still have a house to SELL. What can you do when you’ve found a new house to buy, but haven’t yet sold your current home? You do have a few options, some better than others.
Buy the house: This clearly holds the greatest risk, as lenders are quite cautious these day about lending a second mortgage to a buyer. And because there is no clear idea on just how long you might have to carry 2 mortgages, it’s a stressful jump for the homebuyer as well. Can you carry these 2 mortgages for 6-9 months? A year or longer?
Buy but rent: If you are able to secure financing and decide to purchase your new home, an option is to move into your new place and rent out the home you intend to sell to help offset your expenses. Some will do this and take their home off the market for a year or longer, depending on the real estate market. Some might attempt to sell it with renters in it, but that can be difficult as well, since renters don’t always understand the concept of keeping a home ‘show-ready’.
Make a contingent offer: A contingent offer means an offer has been accepted by the seller and is contingent on the sale of the buyer’s property. The seller can continue to market their property and entertain other offers. If another offer comes in, the first buyer has an opportunity to either let the house go or remove the contingency clause and buy it outright.
Plan Ahead: Most would agree if you can avoid this kind of scenario, you should. Plan ahead – allow your home plenty of time to sell and then be ready to go by having your financing set and a solid idea on the neighborhood you hope to be in. And then when your house sells, you can be ready to make a clean offer and move in short order.
However you decide to proceed, there is a financial risk and an emotional risk as well, as you may end up losing the house of your dreams. But having a licensed realtor to assist in the sale of your home and negotiating terms of a purchase can help alleviate some of the stress and potentially help you avoid this scenario altogether.
The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.