How do you buy your next home when you own a home? There are four different options for purchasing your next house and selling your current home. First, you can buy your next home contingent on the sale of your current home. Second, you can purchase your next house, and then immediately sell your current home. Third, you can sell your current home and then start the process of buying up to your next home. And fourth, you can buy your new home and rent out your existing home. There is also a bonus option, which is to use a bridge loan.
The top four options to be able to buy your next home and sell your current home are as follows:
- Option 1: Buy Contingent On the Sale of Your Current Home
- Option 2: Buy Your Next Home And Then Immediately Sell Your Current Home
- Option 3: Sell Your Current Home and Then Start the Process of Buying Up to Your Next Home
- Option 4: Buy Your New Home and Rent Your Existing Home
- Bonus Option: The Bridge Loan
How Do You Buy Your Next Home When You Own a Home?
There are several options for purchasing your next Diva Dwelling when you already own a home. No matter what your situation is, we can help you design a plan that makes the most sense for you. Keep reading to explore your different options.
Option 1: Buy Contingent
Real estate people use terms all of the time that makes zero sense. And “buy contingent” is one of those terms. Buying contingent means that you are making an offer on another house and that offer is contingent on the sale of your existing home. This option is tough because in order to get the seller to agree to this type of contingency, you need to flex in other ways to make your offer attractive.
Buying contingent means that you are making an offer on another house and that offer is contingent on the sale of your existing home.
This could mean spending over the asking price or not being able to negotiate repairs on the new home. You will also need to make sure to price your old home is listed at a price where you KNOW it will sell quickly. Ultimately, your old home needs to sell before you can close on the new one.
Start Here – What Does It Mean To Buy a Home Contingent
My teammate Lindsy made a great video explaining this entire process along with tips and tricks last fall. Watch our video below and click here to read “What Does It Mean to Buy a Home Contingent?” for all of the details.
Before you decide this is your path, PLEASE call us at least a month in advance. We need to make sure your home is Diva-ready so you can win with this type of buy/sell scenario. This option went away for a few years because of the speed of our market, but I’m seeing it happen again more and more often.
Option 2: Buy Your Next Home And Then Immediately Sell Your Existing House
Many of our Diva Dwellers decided to take this option for their move. The biggest reason why is that they have young kids. The idea of having to move into temporary housing while kids are in school and they were working from home was going to be a nightmare. If you have enough cash on hand or if you can tap into the equity of your current house to purchase your next house, make the move, and then immediately sell your existing home.
Right now, it is pretty easy to purchase a home with a lower down payment. 20% is the gold standard, but we are setting buyers with 10% and even 5% more regularly. And as soon as your old home sells, you can talk to your lender about using the proceeds from the sale to adjust your new mortgage.
Start Here – Can I Buy a Home Before I Sell Mine?
Check out Rocky’s recent video he just made for tips on how to buy a home in 2023. It has a ton of information you will need to make this process as smooth as possible! And you can read our blog “How to Buy a Home in Seattle in 2023” for even more information.
Option 3: Sell Your Existing Home and Then Start the Process of Buying Up to Your Next Place
This is by far one of our team’s favorite options for a few reasons. One, you know exactly how much money you will have from the home sale before you start your search process. Two, it takes a bit of pressure off of your finances. You aren’t stretching yourself thin with two mortgages like you would with the previous option.
This process is pretty straightforward. We get your home Diva ready, preferably in the spring. You sell your home and you move into temporary housing. Then we start your search process during buyer’s season, which in Seattle is typical during the summer.
Start Here – Tips on How to Buy a Home in 2023
Check out Rocky’s recent video he just made for tips on how to buy a home in 2023. It has a ton of information you will need to make this process as smooth as possible! And you can read our blog “How to Buy a Home in Seattle in 2023” for even more information.
Option 4: Buy Your Next Home and Rent Your Existing Home
Now we are at the controversial option, which is to purchase a new home than rent out your existing home. Let’s face it: It’s not always the right time to sell a home. A buyers’ market does not equate to good sellers’ market. Or maybe you have a small enough monthly payment with your existing home that renting your home makes more sense. I do have clients who are better off waiting to sell because of market conditions or because they have a deep personal attachment to their first home. For them, the right advice is to rent. It can be a hard tradition from homeowner to landlord so it is a really good idea to do your research.
Bonus Option: The Bridge Loan
Some lenders have a lending product called a Bridge Loan. This is where they will finance the gap between you buying your next house and you moving in, and then they get paid when you sell your existing home. You do need a lot of equity in your existing home to do this. But this is definitely a real option for a lot of Seattle home buyers. If you are interested in this, contact us and we happy to send you some lender recommendations.
How Did The Buy Up Process Work For Roy’s Diva Dwellers
Roy just listed his friends to sell their Meadowbrook Midcentury Home. His friends chose Option 2 – Buy Your Next Home and Sell Your Existing home. They came to Roy a few months ago looking for a plan to buy a larger Diva Dwelling in Capitol Hill and sell their current rambler in Northeast Seattle. Like a lot of our Diva Dwellers, Roy’s friends’ situation changed during the pandemic and their current home isn’t what they want anymore. Since they bought this Meadowbrook Midcentury rambler, they went from one to two kids, they are working from home a lot more, and they were yearning for better access to downtown. Their new home is now their forever home!
The recent slowdown in the market was exactly what Roy’s friends needed to be able to purchase that new home before selling this one. Today I am going to go over the three options that I went over with my friends to make this whole process work. Plus a bonus option!
How Do You Buy Your Next Home When You Own a Home?
How do you buy your next home when you own a home? There are four different main options for buying your next home and selling your current home. You can purchase your next home contingent on the sale of your current home. Or, you can buy your next house, and then immediately sell your current home. Another option is to sell your current home, move into temporary housing, and then start the process of buying up to your next place. You can also purchase your new home and rent out your existing one. And finally, a bonus option: You can use a bridge loan to buy your next house when you own one.
The top four options to be able to buy your next home and sell your current home are as follows:
- Option 1: Buy Contingent on the sale of your current home
- Option 2: Buy Your Next Home And Then Immediately Sell Your Current Home
- Option 3: Sell Your Current Home and Then Start the Process of Buying Up to Your Next Home
- Option 4: Buy Your New Home and Rent Your Existing Home
- Bonus Option: The Bridge Loan
We are here to help. Our team understands that this process can take a year or two. And we are more than willing to give you a personalized plan to get the ball rolling. Feel free to contact us directly at thediva@teamedivarealestate.com or call/text 206-271-0264.
