Life and Style

College 101: Tips on How to Buy and Sell a House at the Same Time

The housing market isn't always easy to navigate, especially if you need to buy and sell a house at the same time—but it is doable! You have to consider the timing in which you'll be purchasing a new home while selling your current one, but with a stroke of luck, you'll be successful. Keep reading for some advice on selling your house and buying a new one. 

Stick to One Strategy

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The first thing you'll need to decide is whether to sell your home or purchase a new house first. There are lots of things to keep in mind when choosing which path to take. How much money you've saved, whether the market is better for buying or selling, and getting in touch with an experienced realtor are all critical things to consider. 

Buy Before You Sell

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Sometimes, you end up finding the perfect home before you sell your old one. If you can afford to pay two monthly payments at the same time, it may be sensible to claim your new house first. To buy a second house, you will have to show proof that you can afford it. If you need financial assistance for the down payment and closing costs, you can apply for a bridge loan. 

A bridge loan is a popular choice for those who need to buy before they sell. A bridge loan is “a short-term loan used until a person or company secures permanent financing or removes an existing obligation.“ On the other hand, payments on bridge loans are often larger than traditional bank financing, and late penalties are also more expensive. 

One of the downsides of buying before you sell is that it may take months to years to sell your house, meaning you're stuck with two mortgages for a longer time. Another negative is that you may feel rushed to sell so that you can get out of your old home faster. The frustration of your unwanted property not selling quickly can add unwanted stress to the whole experience.

Sell Before You Buy

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Selling your old house before you buy a new one is a good idea if you don't want to make payments on two homes at once (and who does?). Selling first can be decidedly less stressful since it comes with less risk of losing money compared to buying first. You will, however, have to move out of your house once you sell it, so you'll have to find a temporary living situation. Many people choose to rent smaller homes or even apartments while they search for a new home.

Apart from using a real estate agent, you can sell your home through a company that advertises "we buy houses." These companies will make a cash offer for your home and help eliminate the hassle of navigating the real estate market. If you find a reliable cash home buyer, they will give you a fair cash offer, and you'll have peace of mind knowing the exact amount you'll be able to put towards your new home.

A downside of selling before you buy is you'll have to move twice, which can be a hassle. It also may be stressful for some to deal with a burdensome rental property if it's expensive, rent is high, or if you have to downsize a lot. 

Before you decide whether it makes more sense for you to sell your old home before you buy a new one, find an experienced real estate agent to help guide you through the process. It can be challenging to decide which route is best for you, especially if you don't have much knowledge about the housing market or your finances. Like any significant life change, buying and selling your home takes a lot of preparation and planning, but it is worth it in the end.

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