Buy and sell a house at the same time

If you already own a home, the premise of buying another house can sell a house.

Do you sell a house first and live in limbo while looking for another, or do you buy now and foot the bill for two mortgage payments until you’re able to sell? Can you time it perfectly and do both at once?

The truth is you have several options when selling a home and buying another. The best choice really depends on your personal situation, your property (and the market it’s located in), and your budget.

Let’s look at all three options in-depth.

Selling your house before buying a new one

Many people choose to sell their existing house first. This allows you to have the sale proceeds in hand when searching for that dream home, and it significantly reduces the financial stress of the situation, rep calgary homes help to fulfill your dreams financially. There’s no managing two mortgage payments or dealing with closing costs while maintaining two houses. It’s simple, straightforward, and easy to budget for.

The biggest downside to this approach is that it leaves you homeless, for lack of a better word. After you sell your home and while you hunt for another, you’re left in limbo, living in your parent’s basement or on a friend’s living room couch. If you have a family, pets, or lots of belongings, that can be a pretty inconvenient way to live — especially without an end in sight.

You also have to move twice. First, to your temporary housing, and then again, once you find your new property. That means twice the hassle and twice the costs.

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Finally, it can make you feel rushed or under the gun. With your old house sold and no permanent place to live, the stress could push you toward purchasing a home you’re not quite in love with or ready for.

Tips if you’re selling first

In the event you do opt to sell your home first, there are a few steps you can take to ensure the process goes as smoothly as possible.

You can:

  • Arrange temporary housing: Before you list your home, make sure you have a temporary place to live once the property sells. This could mean living with a friend or family member, or it might mean renting a hotel room for a few months while you look for a new house. Whichever option you choose, have a plan (and financial resources) in place to make it happen.
  • Know what you’re looking for in a new house: Go ahead and start narrowing down your list of must-haves, and research potential neighborhoods and communities. As soon as you’ve accepted an offer on your existing house, you should start hunting for your new property right away to minimize your time in limbo.
  • Be ready to buy: Have a mortgage lender in mind and get preapproved for your loan once you choose one. You should also set your budget, preferences, and timeline, so you can start viewing relevant properties as soon as your old house sells.
  • Consider a lease-back: If the buyer of your old house isn’t on a tight timeline, you may be able to negotiate a lease-back. This allows you to “rent” the property from the new owner for a certain amount of time while you look for a new home. You may need to make payments to the buyer in order to do this, or it might mean reducing the sales price or other concessions.
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You should also arrange for some sort of storage solution, especially if you’ll be staying in a hotel or with friends. Portable storage pods are an affordable, easy solution, and they’ll make your final move easier, too.

Buying a house before selling

There are a lot of advantages to buying your new home first, before selling your old one. Primarily, it makes the move easier. You’re able to take your time, move your belongings to the new place on any schedule you like, and avoid living in limbo while you wait for that old house to sell. It’s also a good choice if you’re on a tight timeline. If you know you need to be in a new city for a new job by a certain date, buying first can help ensure you’ve got a place to live by your set-in-stone deadline.

On the financial side, it’s another story, though. Buying your new home first takes serious financial resources. Not only will you still have your existing mortgage payment, but you’ll have a new one, plus closing costs, your down payment, moving expenses, and upkeep and maintenance on both properties. It can be a lot to handle, especially if you’re on a tight budget or limited income.

Buying first may also make getting a mortgage harder. Because you still have the existing mortgage debt to your name, your debt-to-income ratio could be much higher. That could mean a lower available loan balance for your new purchase, higher interest rates, or even not qualifying for a loan at all. According to Quicken Loans, in order to qualify for most mortgages, borrowers should have a debt-to-income ratio no greater than 43%.

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