I think most people are well aware that we are in a very strong sellers’ market right now. Maybe not quite as strong as it was – some homes are even selling without multiple offers. But virtually any home that is priced close to where it should be will sell within a week or so for a very acceptable price.
So your home may have increased in value by up to 25% in the past year. So you have a lot more equity you could possibly make use of. Assuming you are ready to make a move, what are your options?
Well first, having prepared your home to sell, you could list it for sale, then as soon as you have an accepted offer, you are in a position to buy another home. That is the route most people take but it can admittedly involve a little stress, even when a rent-back has been negotiated on your present home.
If you are planning to move to another area, it’s generally easier. Most places are not quite as crazy as the Bay Area. If, having prepared your home for sale, you then spend some time to identify the home you want in another area, you could list your home for sale, and get a deal accepted on a new home quickly.
But what if you want to stay in the same area? Could you buy before selling?
This used to be difficult to arrange but the answer now is yes. A number of lenders have recently introduced programs where they will arrange for a bridge loan that enables you to write a firm offer on a home before your existing home has sold. Some of these programs are even set up so you can buy your new home before your present home is even listed for sale.
There are some strings attached, of course. You have to have a certain amount of equity in your existing home, as that gives the lender an assurance that you are a good risk. You also have to qualify for whatever loan you need on the new home of course, plus you will have tp pay a somewhat higher rate of interest on the amount advanced before your present home is sold. The good news is that the interest you owe may be deferred until your present home has sold, so although it may seem costly, your cashflow shouldn’t be impacted too badly.
At RE/MAX, we have an in house lender who can advise you on exactly how this could work for you, and explain the costs involved in detail. Contact Bernard or Michelle any time, and we’ll start the ball rolling for you.