If you are also selling your home
What if you’re also selling a home?
If you sell your existing home for a ‘low’ price, you’re probably also buying at a low price. If you are upgrading to a larger home, in this market example, this actually works to your advantage.
To buy first or sell first?
Generally speaking, under most market conditions, real estate professionals advise listing your present home and then shopping for your new home after accepting a suitable offer. Most people are unable to buy before they sell their existing home, but are able to time their sale and purchase so they happen on the same “closing date”. Your REALTOR® can provide advice to assist you with making the right decision for your needs.
Many people are able to time their sale and purchase so they happen on the same “closing date”. As a buyer, you can make your offer “conditional” on the sale of your existing home to make sure you’re not left paying for two homes. As a seller, you can try to extend the “closing period” to give yourself more time to find your next home. A REALTOR® can provide advice and counsel during these kinds of negotiations.
If you apply for a pre-‐approved mortgage before starting your new home search, you can define your price range and focus on homes that fit that scope. Lenders will guarantee a set some of financing and the best rate available, based on your situation, for a set time period (usually 90-‐120 days) while you locate your dream home.
A mortgage pre-‐approval removes one of the uncertainties in buying a home. If several buyers are interested in the same property that you are, being pre-‐approved can give you the advantage. Sellers are more likely to accept an offer from a buyer who has been pre-‐approved over a buyer who has no guarantee that they can attain the financing for the amount they offered.
It is always wise to still include a “subject to financing” clause in your real estate offer, to protect yourself against unforeseen issues.
What if you find your new dream home before you’ve started to sell your old one?
Talk to your existing mortgage lender about “Bridge Financing”. This is when your lender (the bank) agrees to lend you the down payment for your new dream home, while you still cover the mortgage on your existing property.