How to Move When You Haven't Sold Your Old Home Yet
One of the most exciting times in a homebuyer’s life may be at closing when you sign on the dotted line and get the keys to your new dream home. But before you start packing up your belongings into the moving truck, what do you do if your old home hasn’t sold yet? Although it may be a bit tricky to sell and buy your home at the same time, it isn’t impossible.
Here are a few tips to consider.
Have a Contingency Offer
If you want to avoid carrying two mortgages, then one of the best things to do is to buy on contingency, which is making an offer on a new home contingent on the sale of your current home. When you make an offer that’s contingent on the sale of your current home, it may persuade the seller to accept your offer once you sell your old home before closing on theirs. This will also allow you to withdraw your offer if your current home doesn’t sell by a certain date. Although this is a good option for some buyers, it may not be too appealing to sellers in hot housing markets who want to sell their home quickly and receive multiple bids from other homebuyers.
Have a Rent-Back Option
Although it may seem odd to rent your own home, it does happen occasionally and can help alleviate some financial concerns as well as avoid moving into a temporary home. This option is convenient when you sell your home and then rent it back from the new buyers while you are waiting to close on your new home. A rent-back agreement is typically for only a month or two. On the flip side, it gives sellers some extra time to find a new house while paying you rent since they are still occupying your future residence, which gives you some extra money as well as avoiding two mortgages.
Find Temporary Housing
Although moving and packing more than once is a nuisance, it’s better than carrying two mortgages at the same time. Finding a short-term rental property or moving in with relatives or friends may be a great option. If you can find a short-term rental home or apartment for a few months, it will allow you to have your own space before the stressful moving and packing adventure begins again. If you can temporarily move in with a friend or relative, you may also save some money from paying rent.
Obtain a Bridge Loan
If you want to sell your current home without taking out a mortgage on your new home, you can get a bridge loan. A bridge loan is an option for homebuyers who can use the money for a down payment on a new home before their current home is sold and finalized. Although this is a good option for some homeowners, a bridge loan does come with its pros and cons.
According to SmartAsset, besides giving homeowners the funds they need for making a down payment on a new home purchase, it also removes the need to make a contingent offer on a home. While this is a plus, the bridge loan does carry risks like the lender could foreclose on the home if you default on your loan. Another disadvantage of getting a bridge loan is higher fees and costs associated with the loan as well as not being able to get a loan from a different lender, which will limit your chances of comparing mortgage rates to find the best deal.