Buying homes can come with its own challenges. Try selling one the same time and the challenges can increase exponentially. Add a slower real estate market in the mix and it could become a nightmare.
Before the housing bubble burst in 2007, it was much easier for homeowners who wished to leverage the equity on their properties. With a home equity line of credit (HELOC), many homeowners were eligible to receive credit up to 100% of their house value. They could then use the money to finance their next home purchase. After closing the deal on the new home, it was much easier to move forward and sell.
Today, it is much harder to come by home equity and lenders are no longer allowing the same amount of leveraging. The industry has changed; therefore, it is time to adapt.
Here are a few tips that could make the process easier:
Understand Your Finances. This is a given. Before you decide to buy a new home and sell your current one, ensure that you can afford it. Get a property valuation to find out exactly how much your home is worth. Consult with your agent and talk to your mortgage broker about a pre-approval loan for financial assistance.
Prepare to sell. Ensure that you understand local market trends. List the house at a competitive price and discuss the asking price with your agent. Hosting open house events is a good way to meet and interact with your potential buyers.
Do all needed repairs. Ensure that you house is in impeccable condition for sale. If the interior looks like it came out of the 1930′s or the sink in the kitchen is broken, make some changes to satisfy your buyers. This is also necessary if you intend to sell the house at the highest possible price.
Closing a deal could take a month or more. Consider moving in with your family during this time or get a leaseback agreement from your buyers. A leaseback agreement will allow you to continue living in the house for a monthly fee after the sale is closed.
Once you have secured a temporary place to live, start hunting for your new home. Be ready to negotiate prices and hire a home inspector to ensure that you are getting the best deal. Start by highlighting the must-haves and work your way to your dream home.
Getting an early start will help you to end the race faster. Research the variables involved to minimize the risk.