How Can You Buy a House Before Selling Your Current House?

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Many homeowners find themselves stuck in a position where it is very hard to buy a house while still owning their current house. Typically a property owner wants to sell their current home before they buy another house. Yet, many property owners who are selling their house do not want to get hung up with a contingency from their buyers to sell their homes in order to buy their homes. Sometimes a contingent offer is your only option. In this article we will go over the options a property owner could have in order to buy a house before selling their current home. Many times a licensed skilled real estate agent will be very helpful in helping you be able to accomplish this.

These are common questions that property owners ask when they are getting ready to sell their house:

Can you buy a new house before selling your old one?

The answer commonly is yes. There are two important things to address: 1-Do have enough income and savings to buy a house prior to selling your current one? 2- Some people can get approved to keep their current house and buy a new house. 

How do you buy a house when you haven't sold yours?

You can turn your existing house into a rental. Typically a lender will allow you to offset up to your entire monthly debt from the current mortgage if your rent is high enough. This is based on having a new rental lease agreement to start when you move out. 

How do you buy a new home before selling your current home?

New construction companies that will build a new home will allow you to have time to sell your existing house. There are real estate agent agents who will guarantee the home seller or they will buy it, and there are cash buyers who will give you a contract to buy your existing house and close on or before your new home is ready to close. 

How do you buy a house while waiting for yours to sell?

There are several ways. Typically the hardest way is to buy your next house with a contingency agreement for yours to get an accepted offer and close or to have your accepted offer already in place and close. These can be very favorable terms for the buyer, but risky for the seller, because they are holding up the sale of their house for the buyer to hopefully sell their house. When you right a contingent offer, you will either use the right language or a contingency form. This helps you not end up paying two mortgages at the same time.

Another way is to use a program that will buy your next house for you for cash that will then give you time to sell your house. There will naturally be a cost for these services one way or another. Then there will be terms around the existing house selling within a time frame, and then you refinancing the current home into a conventional mortgage.

Another option would be for a property owner who owns their house outright. They could do one of three things: 1-They could have enough cash to buy their next house for cash. 2-They could get a new mortgage on the house they are purchasing, or 3-They could get an equity line of credit on their house they are selling.

Getting a New Mortgage to Purchase a House

Typically a mortgage lender will be looking at the potential buyer's credit, debt to income ratio, employment length, and how they get paid. They want to make sure the buyer can afford the old home and new home to allow you to buy before you sell. Then typically, sell your home after you move into your new home or close at the same time. 

Buying a house while selling your current house in a seller's market can be very stressful. A skilled real estate agent with experience in helping a property owner selling a home in a seller's market is critical to have. They will know if you should get an equity line of credit for buying a house, a bridge loan, or a home equity line.

Knowing that buying a house can be stressful and complicated, a home buyer should come in well prepared. Especially when buying and selling at the same time. Sometimes you have to sell your home then stay in a short-term rental to make buying and selling a reality if they work with the wrong real estate agent. 

When you are buying a house while selling your current home, it will pay to be with the right real estate agent to help you sell your home so you do not get stuck paying two mortgages at the same time.

Sell and Stay Programs

If you have enough home equity in your house, you could do a sell-and-stay program. This is when you sell your current home and lease it back. Then when you find a new home to purchase, you can make a non-contingent offer on it. Then when it closes, the program has a real estate agent sell your current house, so you are not paying out on two mortgages. This way to buy and sell can be a great option for property owners needing to buy a new house. You will not have to sell your current home and move out when you do a sell and stay program. You just have to have enough home equity to use a program like this. When the real estate market is hot, this is a great option.

Cash Buyer Options

If you are running out of time selling your house and you need to sell quickly, a cash buyer might be your best option. Your home will sell fast with a cash buyer. There are different types of cash home buyers that you can use when selling your home fast. If your home doesn't sell fast enough, sometimes going with one of these we buy your house for cash companies is your best way, so you do not have to find temporary housing.

When you use one of these cash home buyers when buying a new home, you will need to realize that there will be additional services costs or fees or just a lower offer. 

Selling and Renting Back your House

A post possession agreement could be used to allow you to sell your current house and to rent it back from the new owner as a rent back for a short period of time to allow you to purchase your next home. In a seller's market, this becomes an easier option because home buying is difficult for buyers. Hence, they or more apt to give home sellers the options they seek.

In Summary

The home buying process in general can be very complicated and stressful without a home to sell. Then, add in the stress of buying a new one when you need to start the home selling process of your current home. The ideal world would allow you to buy a home without all of this additional stress. The ideal way to buy a home would be when you get to pick your closing date. Then you sell your home before that closing date and get a small post possession from the buyer to allow you to stay a week while your next home closes. 

Buying before selling is the ideal way to purchase your next dream home with a lot less stress. This can mean you could for a small window have two mortgage payments, which would include your new home and your current home. If you cannot buy before you sell, you can try a contingent offer, and if they do not accept a contingency then you can try a program that will allow you to buy a new home before you sell your current home. There are a few real estate programs for buying a home before you sell your current one. Then if this does not work, you might qualify for a cash buyer before you buy your next home. These cash buyers can allow you to sell quickly if you need that. 

If you are looking to buy before your home sells, this article should have answered several questions for you. Most of these ways are good when there are more buyers than sellers. In a non-seller's market, many times property owners can do a contingent offer. Each housing market creates different demands on the buyers and sellers. If you have a home to sell, consider talking to a licensed local real estate expert about your housing market before you put your home on the market. Each market has different impacts on sellers.

If you feel your home will sell fast, then the odds are you are in a seller's market. Otherwise, you would not think your existing home would sell fast. If you think it will take a long period of time to sell your home, then you are probably in a buyer's market. A slightly stronger seller's market will help you selling your existing home and buying your next home. Then before you sell your existing home, make sure you have enough home equity to accomplish what you are looking to accomplish. Plus make sure the interest rates are in alignment with your needs. In different markets, you have different rates based on the overall economy. Mortgage rates could be much higher than your current mortgage rate. As you can imagine, your new interest rate could impact your mortgage payment. When you are getting a new loan you should consult multiple mortgage companies to find the right interest rate for you. This will help you get the right payment for your new home. This article is not written to give you mortgage advice. Please consult a licensed mortgage company and loan officer for the terms for your home loan options.