By Curtis Rodriguez
Realtor, HomeSmart Evergreen Realty1
Curtis and his team service Riverside, Orange and San Diego Counties.
They say knowledge is power, especially when it comes to buying or selling a home. And when you’re trying to do both at the same time, you’ll need to be armed with plenty of information to make the transition as smooth as possible.
Of course, the age-old question is whether you should sell your home first and then buy a new one, or vice versa. As an experienced real estate agent, I help my clients with these decisions, because before you start shopping, it’s important to know your existing home’s worth and how much you can really afford to pay for your new home. In most cases, you’ll want to sell your home before putting an offer on a new one, otherwise you could be stuck paying two mortgages for longer than you’d like. Even if you live in a hot real estate market, there’s no guarantee that your home will sell right away.
Of course, there are other options to consider if you choose to buy a home first and then sell. One is taking out a bridge loan, which is a short-term loan using your existing home’s equity to buy the new one. However, these loans typically have higher interest rates with much larger payments and stiff penalties for late payments. Another option is to use a home equity line of credit or HELOC to buy the new home. One caution here: If your home doesn’t sell, you might be required to pay the loan in full after a set timeframe so you’ll need to read the terms and conditions of the loan before signing on the dotted line. Before you take on a new home loan, make sure to review your budget carefully, to ensure you have the financial resources to cover any setbacks.
Selling, Then Buying
If you take the safer route of selling your existing home first, you’ll need to ensure that your home is market-ready. Your real estate agent can set up a tour of homes for sale in your area, to see what your competition is and compare sales prices. This will give you a reality check for what your home is really worth. Then you’ll need to address any repairs, make cosmetic improvements and declutter and stage it for potential buyers. Timing is important too; buyers usually start home searching in March and sales stay strong through the summer because many people want to move in before the new school year starts.
Once your home is up for sale, you’ll probably be itching to start shopping for your new abode, which does take time. Keep an open mind and seek out several properties that may be right for you. If you are lucky enough to sell your house right away, you may be able to negotiate a rent-back agreement, allowing you to rent back from the new owners for a period of 60 to 90 days, which gives you time to find another home. Or you may need to find a month-to-month rental. Either way, your agent can help you negotiate terms that are best for you and your situation, including a shorter close time on your new home.
Get an Expert in Your Corner
As you can see, there are plenty of steps to take when it comes to buying and selling a home successfully. That’s why a real estate agent who understands the market will be a key to your success. SchoolsFirst FCU can pair you with both a loan consultant and real estate agent to guide you through the process.
Member Savings with Home Advantage
Another perk: As a Member, if you’re enrolled in the Home Advantage program you’ll receive a 20% rebate from the commission of the participating agent who represents you in your home purchase — or 25% rebates from the commissions when both a home sale and purchase are completed. through a participating Home Advantage agent.2
The pricing you may qualify for is based on factors including your credit rating and the combined loan-to-value (CLTV) of your property. A minimum credit qualifying score is required. Pricing is subject to change without notice. An approved application is required for pricing to be determined.
Equal Housing Lender
- HomeSmart Evergreen Realty is not affiliated with SchoolsFirst FCU.
- Rebate payment is made by First Team Real Estate or HomeSmart Evergreen Realty and is credited to your benefit at the close of transaction. Purchase price must be greater than $150,000 after all credit adjustments. All rebates are subject to limitations, lender guidelines, and other requirements. Certain properties may not be eligible for rebates. Rebate is 20% for purchase only of a residential property in California. Rebate is 25% for a residential property sale and purchase in California. In order to receive the 25% rebates, the home sale and purchase transactions must take place within six months of each other. Please consult a qualified tax professional for advice on tax implications from receiving a rebate. First Team Real Estate and HomeSmart Evergreen Realty are not affiliated with SchoolsFirst FCU.
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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or GreenPath Financial Wellness counselor who can help tailor a solution for you.
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