Nothing compares to finally finding your dream home. You don't want to lose it, so you put your offer in on that day. You can't wait for it to be yours. But there's a flaw in your plan. You haven't sold your current home yet. You can buy a new home before you've sold your house. You just need to re-evaluate your plan.
Buying and selling a home at the same time is stressful. Carrying two mortgages will put a financial strain on any bank account. That's where bridge loans come in. Bridge loans allow you to cover both mortgages short-term. When your home sells you pay back the bridge loan to the bank.
How to know if a bridge loan is right for you
Bridge loans are an excellent option. But only if you are 99% certain you will sell your home quickly. If you are seeing delays in the sale of your home this could cause problems. You are still responsible for paying back the loan. Even if your first home hasn't sold.
Don't procrastinate fixing up the home
Getting the roof repaired? Putting down more sod in the yard? Don't procrastinate when it comes to getting your home ready to show. You don't know what kind of delays might pop up. What if there is a shortage of supplies? Or your contractor has limited availability? You don't want to deal with these problems after you've bought your home. It puts a strain on your finances and sanity. Selling a home is both exciting and stressful. Don't add to the stress.
Examine the market
Buying and selling a home at the same time works best in a seller's market. If you have all the paperwork lined up for a bridge loan and pre-approval start looking at homes. There will be fewer homes to choose from and they will be going fast. Once you find a home you like put in your offer. During this market, your home will sell quickly too. Then you can pay back that bridge loan.
Get pre-approved before you look at homes
What you thought was your dream home may be out of your price range. If you can't afford it, it's not your dream home. Get your pre-approval paperwork processed first. Then go house hunting. You may need to put in an offer fast. It will look much better to the seller if you are already pre-approved for the new mortgage.
Use the same agent
Buying and selling a home at the same time is a juggling act. It is feasible, but not if you are using two different agents. Your agent has the most information about both transactions. They also have the control to close them at the same time. The only time you should use two agents is if you are moving out of state. Agents are only licensed in their state.
Close on Monday morning
The best way to ensure a smooth transaction is to start early. Mortgage transactions take a few days to process. You don't want the weekend to delay you. It's important to meet up in the morning too. Banks don't process wire transfers late in the afternoon.
Backup plan contingencies
What if you sell your home before you've bought another one? Where do you live in the meantime? Is there still packing to be done? Ask the buyer for a rent back contingency. This will allow you to rent the house back for a limited time. You can finish packing and find a new place to live.
What about if selling your home is taking longer than you had hoped? You can try to put a home sale contingency in your offer. It puts a due date for you to find a buyer for your current home. If you don't find a buyer for your place by the due date you back out or renegotiate. This contingency doesn't have a great track record. If you are in a seller's market your offer may be rejected if you include this contingency. But it is an option nonetheless.
Buying and selling a home at the same time may feel impossible but it's not. You must have all paperwork prepared. But your agent is happy to help you with the process.