Unless you’re advancing to a new home every year, chances are the buying and selling process has altered significantly since you were last in a closing. The market has changed, new lender requirements have been presented and you probably have a different set of needs for your next house, leaving you stuck at the first step: Should you buy your new home or sell your current one first?
An easy way to solve this potential conundrum is to peek at how much risk you’re comfortable taking on. If the thought of making payments on two homes at the same time if your current home fails to sell quickly sounds stressful, securing a sale before starting your search for a new home might be your safest bet. Rising home values across the country and low housing inventory may mean that you could sell your home but not be able to find the next place you want right away. The hassle of finding a new place to live could tempt you to buy a home lacking key features you want and need in your next home.
For a better grasp on how you can guarantee the timing of your next sale and purchase are a success, ask yourself these five questions:
Can you handle two loans at once?
Look at your income and decide whether you’ll be able to make monthly payments on two mortgages at the same time. If you can’t, a lender will tell you to sell first.
How quickly do you need to move?
Your main motivation for changing homes can also have an influence on what you do first. If you’re relocating across the country for a new job, for example, placing your home on the market right away might be necessary as you visit your new city to go house hunting. The quicker you can sell your current home, the easier it will be to fully relocate.
On the flip side, if you’re looking for a new home as a step up – whether you’re searching for more bedrooms for your growing family or additional property to fit your desired lifestyle – it may be beneficial to hold off on selling until you find the perfect home.
Have you factored in new regulations?
In October 2015, the TILA-RESPA Integrated Disclosure rules went into effect nationwide, requiring lenders to offer two forms laying out the details of a mortgage to borrowers, one at the beginning – the Loan Estimate – and one at the end of the loan approval process.
The second form, the Closing Disclosure, must be offered to the borrower at least three days before the real estate closing. If you need to sell your home to be approved for a new mortgage, you can’t close on the sale one morning and close on your purchase in the afternoon of the same day – a lending practice Parker recalls being common previously.
Do you need a leg up in negotiations?
Of course, buying your next home before selling your current one does have some benefits. In a competitive market where bidding wars are popular, placing an offer that’s not contingent on the sale of your home will surely get the seller’s attention.
Do you have somewhere to live while you wait?
A tight market with low inventory can leave you without a house, should you sell your home before purchasing a new one.
If you are interested in selling your home, please contact Alex Biliouris at (401) 769-4333. Feel free to visit our http://nextmoverealty.net/ to discover the many ways we can serve you. We can satisfy all your real estate needs!