How do I use this sale to purchase another home?
Download the bite-sized PDF guide here. Our gift to you!
Everybody needs a roof over their head. Period. Selling your home is one thing, ensuring that you can line up your next one can be the next real challenge.
There is always the rental safety net that you can fall back on, but when you think about needing to unpack your boxes twice, you’ll realise that it often isn’t ideal.
We’ve put together some advice for how to use the sale of your home to purchase another one, giving you a seamless transition from old to new. Check it out.
Buying and selling simultaneously
General planning
When you’re selling your home you are often also searching for a new one. Trying to ensure that you can coordinate closing times for your current and new one is the first step to take. Remember: the market can be unpredictable and you are at the mercy of it, but with some clear communication, good planning, and an expert REALTOR® on your side, you stand the best chance of success.
Methods for the market
In a buyer’s market, when making an offer on your new home you could include a contingency in your contract stipulating that your offer to purchase stands only if your current home sells. However, in a hot seller’s market, conditions will generally make an offer less attractive to a seller because of the potential uncertainty of the transaction.
In a seller’s market, you could make selling your current home contingent on buying your new home or you could potentially rent back your house for a period of time.
Using finance
Taking out a bridging loan will help you to “bridge” the gap between the time you sell one property and purchase the next. Most commonly considered by homeowners in competitive markets, bridge financing enables you to use the equity in your current home to make the down payment on your next home, while you wait for your existing home to sell. When you do sell, you can use the proceeds to pay off the bridge loan and any accrued interest.
Selling or buying first
If you have more flexibility in timing, you might also have two other options—sell your current home before buying your next one, or buy your next house before selling your current one.
Whatever approach you take, your decision will depend on a number of things, including your appetite for risk, your current financial situation and external factors like the housing market. Either way, your REALTOR® will help set you up for success.
Selling your home first
What are the benefits of selling your home first?
You’ll have an easier time getting a new mortgage.
You’ll avoid the financial burden of carrying two mortgages at the same time.
You can put money from the sale of your current property toward the purchase of the next property.
It will be easier to negotiate/buy the next home because it will not be contingent on selling your current home. Sellers will know you’re serious. This is especially true in a seller’s market.
You can wait for the best selling price because you will not be in a hurry to close on a new home.
Buying your next home first
What are the benefits of buying your home first?
There will be no need for you to live “between homes”.
You could have an easier time getting your home ready to sell after moving out.
You could make improvements and renovations to your new home before moving in.
Contact your REALTOR® to discuss your options for managing the logistical challenges and complexities of selling one home while purchasing another, we’d be more than happy to help.
Other Seller’s Guides
