SELL / BUY vs. BUY / SELL: Strategy and Decisions
Originally uploaded by thenelsonproject
Here is an outline of options when you’re in a sell / buy vs. buy / sell situation:
A. Sell First
Put your house on the market, once it’s under contract find your new home but the offer would be contingent upon the sale of house #1. In a sellers market, sellers do not like to sign up for contingencies. In a buyers market, this may work. Downside of this approach is it puts time pressure on you to find the right house in a short amount of time with no guarantee that the timing will synchronize itself perfectly and you may feel pressured to buy a house that is less than perfect for you.
B. Staying With Your Mother-in-Law
If you arrange a temporary housing arrangement and your stuff in storage, then you can sell house #1 and take your time to find your next home. Benefit is the funds from selling are sitting there waiting and no pressure to find the new home quickly. Downside is temporary housing (aka wanting to get out of your in-laws basement quickly).
C. Buy First
Talk with a lender and get pre-approved for purchasing house #2 first before closing on house #1. If you qualify, you do not put your house on the market until you find and are under contract on the new house. You may be able to time it quite nicely, maybe having one month overlap of two house payments, possibly zero as the new house payment skips the first month. This option typically requires that you have cash for down payment without relying on the sale of house #1.
Find the new house and rent house #1. Requires cash source for down payment and lender approval and generally a signed lease. Takes the time pressure off, gives you title of landlord.
E. Do nothing.
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