Coldwell Banker Realty - Natick
Lynne Hagopian, Realtor®, Coldwell Banker Realty - NatickPhone: (508) 648-0393
Email: [email protected]

Selling This Home, Buying That One: Tips for Handling Financial Overlaps

by Lynne Hagopian, Realtor® 05/03/2021

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Image by StartupStockPhotos from Pixabay

Unless you're a first-time home shopper, you'll need to acquire your next home while selling your current home. How do buyers finesse this?

When buyers are competing with each other for a tight inventory of available homes, the ones who are ready to come to the table fastest, not the ones with contingencies, are most likely to succeed.

So, what's an ordinary buyer to do? Here are the top solutions—not all for the faint of heart!

  • The collaboration: Ask the buyer of your current home to go ahead to closing, but let you rent it for a month or two past then. If the buyer really wants your place and is in the position to do it, your problem is solved. Obviously, this arrangement isn't for all buyers. But every situation is unique, and this might work for yours.
  • The photo finish: Plan to schedule simultaneous closings on both homes, if a motivated, approved buyer can agree to wait for you to complete your purchase. It's been done. There is some risk here, not to mention moving van challenges! If your buyer has to pull out for any reason, you may still have to close on your new home. 
  • The bridge loan solution: With a bridge loan, you can purchase a home before selling, borrowing against your current home equity until you have the sale proceeds in hand. These are meant to be short loans. A bridge loan will get pricey if your home takes longer than expected to close. Steer clear of depending on this kind of loan for more that the span of a few weeks.
  • The contingent offer: You can line up a new home without having to take on the new mortgage until you're done with your sale. Yet few sellers are happy to accept contingent offers and hold on until a buyer's home sells. Contingent offer agreements usually only stay open for about 60 days and often have clauses that can accelerate the buyer's need to commit, allowing the seller to accept another offer. 
  • The sell-and-hotel method: This is a good way to reduce risks. Sell your home, take stock of your bank account, and know exactly what you can comfortably purchase. Store any furnishings you plan to take with you, and get a short-term rental for yourself. This means moving twice, but it also means you have money from the sale, and you're not buried under two mortgages.

Selling one home to buy the next makes the already complex matter of home buying...more so. But an experienced real estate agent can lead along the best path for your circumstances and put you in touch with financial professionals where needed. 

About the Author
Author

Lynne Hagopian, Realtor®

People say "Home is where the heart is." Well, I love being in real estate and have consistently been a multi-million dollar producer in the MetroWest real estate market working for Coldwell Banker and Hammond Residential, as a buyer's agent, a seller's agent and a home stager. Having lived and worked in this area since the 1970s, I am familiar with the surrounding communities, school systems, and other pertinent information you may wish to learn about when looking for a new home.

My initial background was a teacher of Special Education with a Masters in Counseling both of which I pursued in the MetroWest area until beginning a family. Several years later, I worked in the interior design field and began a shop-at-home decorating business, helping clients choose colors, fabrics, window treatments, and interior finishes. It felt natural for me to progress into becoming a Realtor where I could put my various backgrounds to work assisting clients, whether buying, staging, or selling their homes, as all involve some teaching, counseling, and design skills. I would be delighted to be your number one resource for buying or selling single-family homes, townhouses, condos, or multi-family houses in MetroWest MA.

Feel free to contact me at 508-648-0393 for a complimentary market analysis or to discuss your current real estate needs.