Buying a home is one of the biggest financial decisions most Americans will ever have to make. Something that’s changed for more recent generations though, is that it’s increasingly more common for homeowners to go through this process more than once in their life. Where previously it was expected for a first time home buyer to stay in that home through most of the rest of their life, now homeowners find that they will often have to move into a second or third home at some point. This is usually tied with the fact that we tend to be far more mobile these days, and when a job in another state comes up, you unfortunately have to leave your starter home behind. For other homeowners though, it may simply be a matter of moving into a home that better fits your needs. Maybe you’re looking for a home with a bigger yard or more bedrooms as your family has grown! No matter the reason, selling your first home and buying a new home has unique challenges that you didn’t have to face when buying your first home. This process is often called “move up” home buying, and I’m happy to help! There are a few scenarios that might describe a given move up buyer, and your situation may have aspects of all of them, but you’re likely to find yourself most identifying with one more than the rest.
Family A is a younger couple with a couple kids. The wife has just accepted a fantastic job with a great pay raise, but it’s going to require moving to a neighboring state. While the housing market in their destination state is competitive with each home getting several offers, their finding the process of selling their current home is taking a little longer than expected. As both of them are professionals, the bank has been willing to grant them a mortgage preapproval with the understanding that their current home is listed for sale. A few weeks after they’ve moved, their original home is closed on. This is by far the simplest scenario, but it’s not going to be an option for many buyers. It relies on your credit being good enough, and your bank being willing to make the arrangements.
Family B is expecting a new baby, and needs to move to a larger home. They don’t yet have the credit to close a second mortgage without selling their first home first. They are able to work out an arrangement with their real estate broker to find a buyer for their current home and schedule the closing date to match the closing date on the new home they’ve made an offer on. By scheduling the closing dates concurrently, they are able to close on the house and use it towards the purchase of the new home without having an in-between period they are left without a home for themselves. This arrangement takes more communication and negotiation, but can be accomplished with the right broker.
Family C is moving to be closer to some sick relatives. They’re fortunate enough to have jobs that can move with them, but they aren’t able to qualify for the new mortgage until their current home is sold. Because of the market in their area, the home needs some work done before it can be sold at a reasonable price. They are able to find a seller who will accept a lease option on the home. They will make their offer and move in, but then pay rent on the home for a period of 60-90 days. This gives a cash income to the seller while waiting for the final closing. Their contract stipulates that at the end of the 90 day period they have the option to buy. They are able to move out of their previous home, complete the work needed, and sell it. This allows them to then make their down payment and officially close on their new home.
There are other scenarios that may be helpful in your case, what’s important is to have a real estate broker who has the experience to come up with solutions that work for your given situation. Contact me today to get started!