What things should you consider when you’re buying a new house while trying to sell the one you own?<\/b> What’s the best way to coordinate closing dates to allow yourself a comfortable time to prepare for the move but while also minimizing financial impact? How can you calculate what sort of house you can buy outright (or nearly outright) elsewhere for what you can sell your house for now?<\/p><\/blockquote>\n
Kris and I had been in our first house for ten years when our dream home fell in our lap one day. Until then, we had no plans to move. We were completely unprepared to sell our existing home while buying a new one. Eventually we made it happen, but we violated a number home-buying best practices as we scrambled to make our dream a reality.<\/p>\n
We were particularly worried about how to time things financially. We couldn’t afford to carry two mortgages \u2014 ![\"\"](\"https:\/\/www.getrichslowly.org\/wp-content\/uploads\/moneyhouses.jpg\" "\\"Selling")
how would we possibly make ends meet? Ultimately, we were saved by the rise of the housing bubble and a friendly banker. Our home sold in one day<\/i>, and we were able to close on it soon after closing on the new house. Meanwhile, a home equity loan floated us the cash we needed to get by.<\/p>\n
I don’t recommend following our example. I think it’s better to be prepared, to make your move in a sensible fashion.<\/p>\n
Selling Your House Before Buying a New One<\/h2>\n
If you sell your home first<\/b>, you’ll have the cash needed to make the transition, but you’ll be homeless until you’re able to close on the new property.<\/p>\n Neither option is ideal, especially since you’ll likely have to move your stuff twice<\/i>. But financially, this is by far the smartest choice.<\/p>\n If you buy your new home first<\/b>, you can end up in a cash crunch, especially in this current market. If you don’t have enough in savings, you’ll need to borrow money until you can sell your existing home. You can tap into your home equity, take out a “bridge loan”, or (as a last resort) borrow from your retirement savings. Run the numbers through your own spreadsheets or mortgage calculators and understand what you might be getting yourself into.<\/p>\n Kris and I faced a similar situation three years ago. We hadn’t been planning to move, but when we found our dream house, we sprung into action. We were fortunate that:<\/p>\n First of all, my bank allowed me to take out a home equity loan to get money for a down payment<\/b> despite<\/i> the fact I intended to repay the loan in only two months. The bank’s lending rules prohibited this maneuver, but my loan officer processed the loan anyhow, and told me not to mention my intentions to anyone else.<\/p>\n After our offer was made and accepted, we rushed to prepare our home for market<\/b>. Because we hadn’t been intending to buy, we were not ready to sell. With advice and help from friends, we made immediate cosmetic repairs. (The bones of the house were very solid \u2014 it was a thirty-year-old ranch.) I had just repainted a couple of rooms the previous fall. Kris’ gardening hobby paid dividends as her flowers helped add curb appeal.<\/p>\n\n
Buying a New House Before Selling the Previous<\/h2>\n
How We Did It<\/h3>\n
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