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How to Buy a House Before Selling Yours | One Family's Story

Bret Chance

Integrity, hard work, do the right thing, problem-solving, professionalism, driven, teacher. Those are words that describe Bret Chance...

Integrity, hard work, do the right thing, problem-solving, professionalism, driven, teacher. Those are words that describe Bret Chance...

Feb 2 5 minutes read

Did you know you can buy a house before selling yours? 

So, you want to buy a new home, but the idea of having to sell yours first stresses you out, right? The thought of having to keep your home perfectly clean for showings, having strangers in your home, or having to get all of the kids and pets in the car and drive around for an hour doesn’t sound like fun. And what about the stress of having to time the sale of your home with finding your next home? What if you can’t find the perfect home before you have to move out of your current home.

Well, many of our clients have opted to buy their next home first, move in, and then sell their previous home once they’re all moved out. 

(Rather watch than read? Click on the video below.)

One Family's Story

Before we get into the three ways you can buy before you sell, let me tell you a quick story about our last client, the Mitchell family, so you can see one way this works. (We’ve changed their name to give them some privacy.)

The Mitchell family decided to move to a new home in Mansfield, Texas (south of the Dallas-Fort Worth metroplex) because they were looking for special programs for their kids' education, they needed a bigger house for their growing family,  and the dad was driving an hour and a half one way to his job daily!

They didn't want to make a double move since it would be too difficult for their family.  We told them about the three ways they could buy before selling, and they were so excited! They chose to do a bridge loan so they could buy before selling and avoid the double house payments.  

They settled on a new home community with a builder they liked and a floor plan that really fit their family’s needs.  But, we hit a snag when the builder’s lender did not offer the bridge loan program. The builder was adamant that the Mitchell family must sell their home first before they would move forward in building their new home. 

And not only that, but they wanted them to sell their home months before their new home would be complete. Thankfully Bret was able to use his ninja negotiating skills with the builder so they agreed to allow the Mitchells to use an outside lender with them still being able to take advantage of the builder incentives of paying their closing costs.

 This saved the Mitchell family thousands of dollars and a lot of stress. Not only that, but they were also able to get a brand new home, avoid two house payments and a double move, their kids will get into the schools they wanted, and the dad cut down his commute time by two hours! 

It always excites us to help people improve their quality of life. 

Option 1: The Bridge Loan

Now, let’s get into the “how”. There are three ways you can buy your new home before you sell your current house.

The first option is to get a bridge loan. This was the best option for the Mitchell family. 

With a bridge loan you don’t have to qualify for two mortgage payments, and you don’t have to make any payments on your new home for up to six months, which gives you time to sell your current home. Quite a few of our clients have chosen this path and they have been so happy with the ease of the process.

Option Two: A Loan Recast

A second option that allows you to buy a new home first is a loan recast. 

Now with the loan recast, you will have to qualify for two mortgages and make those payments until your current house sells. So knowing how long it will take to sell your current home is something you’ll want to be aware of up front. 

Once your current house sells, you can use the equity from that house to put down on your new home loan and reset the payments, while keeping the same interest rate. Another advantage of this option is that you don’t have two sets of closing costs.

Option Three: Become an All-Cash Buyer

A third option allows you to become an all cash buyer on your new home before you sell your current house, avoiding two mortgage payments. 

We’ve partnered with a reputable company that buys your new home for cash, then allows you to buy it back from them at the same price with a traditional mortgage when your current house sells. You only pay rent on your new home until your current house sells, plus a convenience fee to the servicing company. 

We're Here to Help

As always, give us a call or send us an email if you’d like our help in helping you through this process - Schedule a time to talk.

You’ll feel great about having the right information and guidance so that you can make smart decisions and have peace of mind when deciding whether to buy or sell your home.

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