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Move-Up Buyers Information

Buying First Vs. Selling First in Wake County

One way families can reduce the stress and relax a little more in their decision making process is to find the perfect home to buy before they sell their existing home.

To begin exploring if this is a realistic option for you, we must answer two questions.

  1. Am I in a financial position that would allow me to buy before I sell my present home?
  2. Must I sell my current home to be relieved of the debt and expense first?

Here are the advantages and disadvantages to buying before you sell. 

If you can financially afford to buy your move-up home without selling your current home first, you will experience the least amount of stress in your decision making and move.

Families in a financial position to buy before they sell have more choices of homes. They have more time to shop for the perfect home since they are not being rushed out of their current home with a closing date fast approaching. They have more home choices because they can consider homes that take longer to close such as new construction or short sales.

In addition, they can move at their leisure, taking weeks if they wish  instead of days. And, their lives are not inconvenienced by home showings since they will place the leave behind house on the market vacant. It is a much easier transition because there are less moving parts that can go wrong and the time pressure is removed.

Buying your move-up home before selling your existing home will give you more options and a lot less stress since you are not dependent upon another person closing on your existing home to set you free to move forward with your new home. However, there is a financial cost so let’s look at this and consider all the ways you could chose this plan.

Multiple Options Available When Buying a New Home Before Selling Your Existing Home

Very few move-up home buyers are in this financial position to buy a new home before selling their existing. Most homeowner’s need to be released from the current mortgage debt of their existing home and other housing expenses before they can qualify for the new mortgage.

Please understand this may not be an option for you but, let’s get creative and see if it is possible. A life with less stress and more options to find the perfect house may be worth the cost.

Families that are financially able to pull this off usually have one of these scenarios:

  • High enough incomes that allow them to qualify for two mortgages at the same time
  • A paid off mortgage on their present home
  • Enough cash saved to purchase their new home without a mortgage. It should be noted that 17% of home purchases in the Triangle are cash
  • Creative financing from a very experience mortgage lender who has many programs

In some cases, the mortgage is not paid off and there is no cash saved but there is enough equity in the house to afford a bridge loan or equity line of credit for the needed cash flow. With these two temporary loans, it allows homeowners to pull the money needed for the new purchase out early and it will be paid back when the existing home sells. Think of this as a short term loan against your current home. These types of loans are usually for one to three months and with some mortgage programs no payment is needed during this time.

Others choose to finance their new home with a first and second mortgage to reduce the need for immediate cash flow out of their existing home and when their house is sold they use the equity from their leave behind house to pay off the second mortgage.

When it comes to financing there are many creative ways to find a solution and we have relationships with the best lenders in town to open many affordable options for our clients.

With all of these scenarios, where borrowing money is involved, the homebuyer would have to have high enough income and low enough debt to qualify for two mortgages at the same time. The best way to find out if you are able to qualify for a mortgage without selling your present home is to begin by calling one of our mortgage lenders. 

What To Do If You Must Sell Your Current Home Before Buying a New One

When the catalyst for change means you have no choice but to sell your current home first, you will have many pieces of the puzzle to put together and multiple moving parts to manage. There is no doubt you will need the expert help of an experienced listing agent who has represented thousands of sellers to design a plan for you to accomplish your goal of selling, buying and moving up at the same time.

This puzzle begins by finding a very experienced Wake County Realtor on the listing side of a purchase transaction. We refer to Realtors such as this as a listing agent, seller agent or seller representation. A complicated move like this needs experience. The Realtor that helped you buy your current home represented you as a buyer agent. That is, unless you bought new construction from the builders sales representative or a for sale by owner without representation at all. In this case, it's definitely not advisable to call them because they have not experience and will not help you.

Most home buyers have a buyer agent represent them because it is free. However, that person still may not be the best for this new job. It is hard for a buyer agent to also be an expert listing agent. In fact, most are not. It is two totally different transactions that require two different skill sets.

To find the expert sellers agent in your area, look for a Realtor who has a track record for listings and selling a lot of homes in many different areas of your city. Market knowledge comes from understanding the total market, not just your one neighborhood. So be careful here or you may get fooled. Just because you see a for sale sign in your neighborhood or someone mails you a post card calling themselves your “neighborhood expert” does not mean they really are an expert. For sale signs and post cards are just a form of marketing. Your Realtor should be looking at the total market and not just your one neighborhood.  Make sure to call those Realtors who demonstrate experience and a track record for consistent success.

After all, your home is one of your largest financial investments and will play a huge part in your future retirement.

We Can Help You With Your Next Wake County Transaction

To learn how we can provide you with expert assistance as a move-up home buyer, then please contact us at Linda Craft & Team.  We will work diligently to get you the results you want on the Wake County real estate market, and we'll make it as stress free as possible for you in the process.

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