Whether you are interested in moving into a bigger space or would like to move into a nicer neighborhood, it can be challenging to start the home buying process if you already own a home. As you search through listings for your next dream home, J.Christopher Real Estate Group would like to share a few strategies that can help you buy and sell a home at the same time.
“Buying a new home while currently being a homeowner is definitely like ‘being stuck between a rock and a hard place,’” said Jarrod C. Lewis, owner of J.Christopher Real Estate Group.
One of the main concerns homeowners have is the thought of being responsible for two mortgages, according to real estate experts. “Having one mortgage can be expensive enough and throwing a second one into the mix could discourage anyone from seeking another property, but it is a real possibility for those willing to engage the real estate market,” Lewis said.
With homes selling at record rates, here are some strategies to help home buyers secure another home before it is snatched up.
Make an offer with a sale and settlement contingency
Homeowners interested in buying another home can make an offer on that property with a sale and settlement contingency. This means you only agree to buy the home on the condition that you are able to sell your current home.
Buy first, sell or rent your other home later
If home buyers are in a financially secure position, they can try to finance their next property and worry about selling their first home at a later time. The drawback to this strategy is that homeowners may feel rushed to sell their home quickly and could end up taking an offer that is lower than market value. An alternative solution might be to rent out the first property and use the rental income to pay the mortgage, which could help homeowners build equity or possibly mark the beginning of a real estate portfolio.
Apply for a HELOC or bridge loan
Applying for a HELOC or bridge loan is not for everyone, but under the right circumstances you could be living in your dream home sooner than you think. This loan type allows buyers to borrow a line of credit based on the amount of equity available in their first home, which is used as a collateral. Home buyers typically use some of the credit for the down payment of the second home and other fees. Once buyers have moved into their new home, home buyers can pay back the loan in full by selling their first home. After all debts are settled, home buyers may receive money from whatever is left over from the sale.
These are just some strategies homeowners have used to buy a move-up home. While purchasing a better home may appear complex, time-consuming, or stressful, a real estate agent from J.Christopher Real Estate Group can help make your buying experience more pleasant. If you are planning on making a move, call us at 401-830-6906 to start the process today.