All of us know, moving can be stressful but I like to focus on the excitement and possibility of a new place that is creating the move in the first place! There are important decisions to be made, and factors to consider, especially if you own your own home and intend to buy another home in your new location.
Questions You Need to Ask
Do you want to buy your new home first? Should you sell the home you live in right now first? Are you in a seller’s or a buyer’s market? What kind of market is the location you are moving to? Don’t worry, find the answers below!
Buyer’s Vs. Seller’s Market
San Diego, the city I call home, is decidedly a seller’s market at this time. What this means is, there are more buyers than there are homes available for sale, giving sellers more leverage. In a buyer’s market, the reverse is true with more homes available for sale than there are buyers, giving buyers more leverage. The market does change and can be different in other parts of the country so it is always best to either research or consult with a local real estate agent to go over current market statistics.
If you choose to sell first, this is what you need to know:
- Contingent offers are less competitive. By selling your home first you are upping the chances of your offer being accepted over another potential buyer.
- You no longer need to worry about being stuck paying two mortgages at the same time should it take longer than expected to find your new home.
- You can ask for a Rent Back (60-90 days) to allow yourself more time to find your perfect home.
- You may need to pay for storage and temporary housing if unable to find your new home right away.
- Once your old home is sold, you know exactly how much equity you can put towards the purchase of your new home.
If you choose to buy first:
- You can choose to qualify yourself with a lender for both homes and sell your home after you close. The lender may have specific requirements in place such as proof of “x” amount of monthly mortgage payments in the bank.
- This route ensures you will only have to move once because you still have your current home to live in as long as you need.
- You can choose to rent your old home to cover the mortgage until it sells. Keep in mind, the tenants would need to agree to be cooperative with future showings.
- You can purchase your new home with HELOC (home equity line of credit). This allows you to borrow against the equity in your current home. A bridge loan is similar, however is a short term loan offered by a bank to cover your down payment until your home sells. Best practice for both of these options are to repay as soon as your home sells.
- You can place a contingent offer on your new home of choice specifying your current home must sell before you can close.
- Or, you can delay your own closing without contingency to sell. Match the closing dates of your old home to the closing dates of your new home. This makes your offer to buy more attractive and as we are in a seller’s market, a buyer may be willing to wait. Keep in mind, this does still put you at risk of having two mortgages should your buyer back out.
Either way you choose to proceed, it is important to determine what your timeline is moving forward and prioritize your next move accordingly. Price your home right. Buyers are educated and actively looking at available homes on a daily basis.
Make sure you are diligently saving money for your move and expenses. Hiring an inspector when selling your own home will help eliminate unexpected surprises.
Don’t be afraid to reach out for help in the early stages to effectively navigate your move. As your local San Diego real estate agent, I am at your service.
