The short answer is yes! Many homeowners buy a new home before selling their current one. However, the right approach depends on your finances, your timeline, and the current housing market.
If you’re thinking about making a move in Central Massachusetts or Southern New Hampshire, here’s what you should know.
Option 1: Buy Before You Sell
Buying first can be a great option if you’re worried about finding the right home after selling your current one.
Pros:
- You have more time to find the right home.
- You only have to move once.
- You can take your time getting your current home ready to sell.
Things to consider:
- You may need to qualify for two mortgages, even if it’s only temporary.
- You’ll need enough savings or financing to cover the down payment and closing costs before your current home sells.
Option 2: Sell Before You Buy
Many homeowners choose to sell first, especially if they need the money from their current home to purchase their next one.
Pros:
- You’ll know exactly how much money you have to put toward your next home.
- You won’t have to worry about making two mortgage payments at the same time.
- Your budget for your next home will be much clearer.
Things to consider:
- You may need temporary housing if you don’t find your next home right away.
- You’ll be shopping in the current market, which can sometimes mean moving quickly when the right home becomes available.
Can I Use the Equity in My Current Home?
Yes. Many homeowners use the equity from the sale of their current home as the down payment on their next home.
If you need access to that equity before your home sells, there may be financing options available, such as a bridge loan or home equity loan. Your lender can help determine what makes the most sense for your situation.
Can I Make My Offer Contingent on Selling My Home?
Yes. This is called a home sale contingency.
A home sale contingency means your offer depends on selling your current home first.
Some sellers are willing to accept these offers, while others may choose an offer without contingencies, especially in a competitive market. An experienced real estate agent can help you decide if this strategy is right for you.
So, Which Option Is Better?
There isn’t one answer that works for everyone.
Buying first may be the better choice if:
- You have enough savings or financing.
- You don’t want to feel rushed finding your next home.
- You’d like to avoid moving twice.
Selling first may be the better choice if:
- You need the equity from your current home.
- You want to know exactly what your budget is.
- You’d rather avoid carrying two mortgage payments.
The Best First Step
Before deciding whether to buy or sell first, it’s a good idea to meet with both a local real estate agent and a trusted lender.
They can help you:
- Understand your home’s current value.
- Estimate how much equity you have.
- Review your financing options.
- Create a plan that fits your goals and timeline.
Every homeowner’s situation is different, and having a plan before you list your home can make the entire process much less stressful.
Frequently Asked Questions
Can I own two homes at the same time?
Yes. Many homeowners temporarily own two homes while transitioning from one property to another, as long as they qualify financially.
Do I need to sell my house before buying another?
Not always. Some buyers purchase first, while others sell first. The best option depends on your finances and personal situation.
Can I use my home’s equity for a down payment?
Yes. Many homeowners use the proceeds from the sale of their current home toward the purchase of their next one.
Is buying before selling risky?
It can be if you aren’t financially prepared. That’s why it’s important to talk with both your lender and your real estate agent before making any decisions.
Ready to Make Your Move?
If you’re thinking about buying a new home before selling your current one, our team at Real Estate Exchange is here to help. We’ll walk you through your options, answer your questions, and help you create a plan that works for you.
Whether you’re buying first, selling first, or just starting to explore your options, we’re here to guide you every step of the way.
