It’s a common predicament: you need to sell your home and at the same time buy and move into another, possibly in another city. Since it’s not likely that you’ll close on both homes on the same day, how do you proceed? Buy first or sell first? It’s a classic “chicken or the egg” scenario.
If you sell first, you’re pressured to move, perhaps into temporary quarters. But if you face something like job relocation, there may be little choice. If you buy first, you might be paying two mortgages for some time. But if you can’t afford two payments, you’ll probably have to sell first to qualify for a loan. What a headache!
There’s a beast called a “contingency contract,” wherein you make an offer on a home that is “contingent” upon selling your current home. Experience has shown, however, that sellers will not be enthused by such an offer. Why should they take their home off the market while waiting for the possible sale of your home?
The best bet is to have a good conversation with your financial planner, realtor & lender to better understand the options which will best suit your specific needs & particular situation.
PDF Download: Counting Your Chickens
Note:This article was originally published on this site on August 25, 2016. The text has been updated for accuracy.