When you buy a home and sell one at the same time, it can be challenging managing the process so you avoid being homeless while transitioning from one place to another. While you can rent a temporary place to stay if your home sells before you're ready to move, there are things you can do to avoid that additional expense. Here are two of your options.
Add a Home Sale Contingency
A common thing people in this situation do is add a home sale contingency to any offer they make on a house. This contingency essentially notifies the seller that you will only follow through on the purchase if you're able to sell your current home first.
There are a couple of benefits to doing this. First, you'll avoid financially overextending yourself. If you don't have the cash to buy the new house, you'll need to take out another mortgage. Not only does this mean you'll be carrying two mortgages until you sell your house, you may be limiting your options as many banks prefer not to underwrite a mortgage on a second home if it doesn't appear your current income can support it. Placing a home sale contingency avoids this issue by letting you pay off one mortgage before obtaining another.
A second benefit is you'll be able to remain in your current home until it sells. Be aware, though, you'll need to keep the sellers of the other home abreast of your situation so they can make the proper arrangements to vacate when you need them to.
Negotiate to Stay Longer in Current Home
Another option available to you is to negotiate an extended closing period with the buyers of your current home. This works best if you are set to close on your new home within a few weeks of selling the one you already own. Buyers are generally willing to provide sellers some flexibility when it comes to their move out dates, but they typically don't want to wait months to take possession of homes they bought.
If you need longer than a few weeks to transition to your new house, talk to the buyers of your home about renting the place until you can leave. Although this may cut into your budget a little, this option will likely be cheaper than staying at a hotel since the buyer may only charge you the amount of their monthly mortgage. Even if they charge a little bit extra, you will save money on storage and moving truck rental fees that may make up for the difference.
For more information about this issue or help buying and selling a home, contact a real estate agent.
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