When should we put our existing home on the market if we are thinking about buying another home?

Often I am asked about the timing of buying and selling. The first question I ask is, “Can you buy the next home without selling your existing home?” Many lenders will allow sellers to borrow not only the mortgage amount on the new home, but also a “bridge loan”, which is the equity in your existing home. In a worst case scenario, you have a new mortgage, an existing mortgage, and a bridge loan payment.

The next question is often, “Why would I do that to myself?”. There are times that the right home in the right location and at the right price is available now. As an example, relocation companies will not allow sellers to accept contingent offers (contingent on the sale of another home). Therefore, to capture your new home, you need to purchase it prior to the sale of your existing home. Also, many sellers want to know where they are moving to prior to selling their existing home. The bridge loan allows them to select and purchase the next home.

For many buyers, the traditional method of selling the existing home first and then purchasing the next home is far more within their risk tolerance and financial capabilities. In that case, I recommend listing now and watching the market for the new home, but not making the purchase until the existing home is sold.

For current market information about your existing home, call me today. We can discuss all of your options in buying or selling.