The common dilemma with homeowners wanting to buy a new house is whether to buy first, then worry about selling or sell first, then look for the new home.
Texas House Buyers – Real Estate Tips: All home sellers have the same dilemma. They wonder if they should sell their current home first, and then buy their new house, or should they look for a new house first, and then sell the current house? Perhaps they should do both at once. The answer is different in every situation. It’s going to depend on several factors what course of action should be taken.
Selling your home first is, of course, a good idea. Especially if you have equity in the house you can go forward with your next home purchase with plenty to put down on the new one and you also have some operating capital to use for temporary rent until you find the right house.
If money is very tight and you have no real profit that will come out of the current house sale, you will not have much in the way of options. The best course of action for you might be to aggressively sell your current house for below market value to get it moving quickly and attract more interest from buyers.
You can look for your new house and hope to sell before you buy, but if not you’ll be paying mortgage payments on two separate houses instead of just one. This may be possible for you at least for awhile, but then again it might be near impossible for you to pay two loans at once, even for a short time.
Consider that if you are still paying on the first house mortgage it will be particularly difficult to get a loan for the second house. This is not something banks and other lenders will be anxious to do. The current market will have to help you make your decision as well, because in today’s market, for example, it’s so tough to sell a house that it often takes a good long time. You can understand the lenders’ position in being cautious about you taking on a second loan while still paying for the first.
Being in this position can cause quite a Catch 22 but there is a solution. You can buy your next home and if time runs out you can sell your current house to a real estate investor for cash within a week or so. This leaves you free to buy your next home without being stuck paying two mortgages.
Filed under: House Selling