We all know how much efforts and sleepless nights it would take for buying a house. Right from searching the enormous database of listings to finding the perfect neighborhood and with an ever-lasting list of paperwork waiting, purchasing a home can indeed become hectic and frustrating. Well, how better can it be when you are planning to couple it with selling a house at the same time? Talk about an overwhelming headache right!
Buying a new home while selling the current one in NYC at the same time is all about timing. It might seem like a Sisyphean task but, with the right approach and a bit of luck, it can be possible. Your primary goals for buying and selling house at the same time might be to get the highest reasonable price for your current residence, to buy a new one at a lower price and to get done with the whole process without any hassle. Well, with an experienced real estate agent by your side, all of these can be fulfilled with ease. Allow us to break this whole scenario into fragments so that you can digest it better.
Let’s categorize this into two different strategies:
- Buying house before selling the current house in NYC
- Selling house before buying a new one in NYC
Each of these instances mentioned above will have their pros and cons, and it’s you who must decide which is more feasible according to your living standards. Let’s have a brief look into each of these strategies.
Buying a House Before Selling in NYC
Just as the title states, the process is relatively straightforward. You will proceed with the purchase of a new home while your current home is already listed for sale. You can already see through the disadvantages of this approach. This might never bother you if you are financially capable but, the real question is, are you really up for it?
You might never know when you are going to end up selling your old home after you’ve listed it for sale. The longer it takes, the longer you’ve to pay mortgage payments. Now you’ll have to pay the mortgage for two properties for an unknown period. Another challenge is finding the fund for down payments and closing costs for the new home. As we said earlier, this wouldn’t bother you much if you are financially stable. The next step is checking equity on your old home. If you have an equity in the old house, then you’ll make a profit whenever you sell it. If you have a negative equity, then there are a whole new set of challenges that you need to face. If you owe more on mortgage loan than the house is worth, you’re going to have a hard time selling it. Negative equity complicates the whole process of buying and selling a home.
Then, how can I make it happen?
1. Purchase with Significant Savings
Simple but effective. If you have enough savings to pay for your new home’s down payment, closing costs, inspections and moving expenses, proceed with this strategy. You can sell the old home later after the dust settles. You can also sell your house to “we buy houses for all cash in NYC” companies for faster settlement and cash.
2. Purchase with a Home Equity Line Of Credit
Being eligible for a HELOC will aid you in purchasing your house before selling the old one. A home equity line of credit allows you to borrow against the equity in your current home. If you qualify, then you can access money for your down payment with HELOC and then pay it off when you sell your home.
3. Bridging Finances
Bridge loans or Bridging finances are similar to personal loans but offered at rates substantially higher than regular home loans. This is a short-term loan provided by a bank to cover your immediate fund needs for your new home’s down payment.
4. Renting Home
Listing house for rent in New York can be one of the best options you can try when you are planning to buy a house before selling the old house. This will allow you to cover the mortgage costs while delaying the need to sell the home. List your home now and find renters for your old home. If you don’t want to go through the troublesome process of finding a proper renter, it would be a wise decision to hire a real estate agent to cover up for you.
5. Buy From a Trusted Network
Don’t be deceived by the outer attractions of a house. When you are planning to buy a new home with a lot of dollars involved, make sure you are getting the best. Well, you don’t need a downgrade right. Buy or look for new houses from trusted real estate agents in NYC.
Selling a House Before Buying in NYC
Most of you might find this as a safer option as there is less financial risk involved. It is simple and clear because you use the money that you get from selling old house for funding the down payment and closing costs of the new house. This will also negate the risk of ending up with two mortgage payments. But there are more logistical hurdles involved than it meets the eye for this approach. There’s a long history of homeowners who’ve overestimated their current home prices and purchased from an optimistic foresight only to find themselves in deep financial crisis.
You’ll have to move in twice! Since, you’ll need to find a new place to rest your head at the time of selling the house, stepping into an apartment or a rental would be required. This is still a waste of funds according to the size and nature of space your family needs. Selling your house before closing in your new desired home might also end up in tragedy. You’ll never know how much time it would take to find a perfect new home to fit your family and make yourselves comfortable. If you are proceeding without a proper plan, this whole scenario can be a single ticket for being homeless.
How to proceed with it then?
1. Start Searching For A New Home Now
The moment you list the house for sale, start searching for a new one right away. Finding a perfect home just like in your dreams might be a bit challenging especially taking account of the less period of time you’ll have. Hire an experienced real estate agency to find you a new home to ease out all the stress dwelling procedures.
2. Sell Distressed House Fast
Finding a buyer for distressed houses can be challenging. Opting “we buy houses for all cash companies in NYC within 3 days” for selling distressed property is the best and smartest option. Most of the trustworthy real estate companies in New York will buy houses in 4-5 days if the required formalities are met from both your side and the company.
3. Rent a House
Sometimes closing one sale before starting another one can be the best option. It would be wise to rent out a home or an apartment all throughout the procedure to make sure everything goes along smooth and subtle.
4. Sign a Rent-Back
Most of you might not be aware of a rent-back provision. A rent-back provision is an agreement where the new owner allows you to stay for 60-90 days longer in your old home. This will give you enough time to deal with all the moving and paperwork without making things complicated. But, before you proceed with this option make sure you are in a seller’s market where buyers have to be more flexible in accepting to your terms.
Winding Up
If you’re considering these strategies for buying and selling a house in NYC at the same time, we recommend consulting with real estate agent before proceeding further. A listing agent might be the perfect one to suggest what’s best for you. He/she can find a proper buyer/ renter for your old home and can find you a perfect new home as in your dreams.