Home Selling And Buying: Which To Do First
You have made a choice to sell your current house and buy another. Which comes first…buy or sell? Either one is difficult. Doing both is even more disconcerting. Which should you do first? Some pointers from a Houston Heights Realtor.
You have 3 basic options when making a decision whether to sell or buy first:
A. Sell your current house, close on it, then look for and purchase your next house…No concerns about 2 mortgages
B. Make a “contingency” offer on a house…The closing on this house is contigent upon you selling yours…Why would a seller go along with this?
C. Purchase the second house; then put your first one on the market and sell…Now you have 2 mortgages.
A… is the cleanest, safest answer. Sell your house first, and then purchase your next one. You do not have to stress about whether your place will actually sell. It is sold; you have got the money to do whatever you want. Also, the person you buy your next house from knows you’re really serious. In fact , you’re now homeless.
B… is the weakest way to get a house. The contract is “contingent” upon sale of your current house. That means if your place does not sell, you can back out of the contract and get your earnest money deposit back. What seller would take a low offer on his home; take it off the market; risk losing a “real buyer” in the hope that you can sell your home in time to close? Not very many would do that. That is what makes a contingency offer so weak; the buyer is simply not in great position. He wants to close on it; he is hoping to close on it; but he won’t be positive he is going to close.
This choice is stronger however; if your home is on the market and under contract. You can be more confident. Go forth and buy! The owner of the house you have got an interest in knows you’re really serious.
C… is a rare option because few buyers can afford two mortgages. (Your bank makes that call, and they hate risk). If nevertheless you can swing 2 mortgages, you can buy your new residence and then put yours on the market for sale. Price it right though, nobody wants 2 mortgages for very long.
Different conditions can make a difference: Are you getting company re-location assistance? Perhaps they might pay that 2nd mortgage till your home sells.
As I mentioned, option A… Is the strongest/safest position, but involves 2 moves, which no-one likes. One option might be to sell your existing first, but with a long closing period. If you had a 60 day closing period on your current home, that should be adequate time to find and contract for your next home.
Other factors to consider: What’s your housing market like? If it’s a Buyer’s Market, you definitely need to sell your house first. If you have moved into the new house, then find out you can’t sell your old one, you’d be hurting. How difficult is it to estimate home sales in your subdivision? An older neighborhood with no two homes alike, like early 1900’s Houston Heights Homes aren’t as easy to predict time for home sales.
As a wrap up: Sell your existing home first, then purchase your next house , unless some of the circumstances above apply.
Rich martin is a Houston Heights Realtor, selling mid century and older homes in inner loop areas of Houston. Inner loop area homes such as Woodland Heights homes is his specialty.
Tags: buying a house, Home Buying Tips, house selling tips, Selling a house
