Scenario #1: You’re in a seller’s market in which you’ll be caught in a bidding war for the house you want to buy.
Once you sell your home, use the money to make a clean offer on the house you want to buy.
If everything goes well, you can move out of the rental in a few months.
Whether it’s to start a new job, relocate with a loved one, or to accommodate any lifestyle change, you’ll be needing the money from your home equity to uproot yourself and start a life elsewhere. Besides, if you’re moving to a new city, it may be wise for you to rent a bit and explore different neighborhoods before buying your new home.
Be sure to find a buyer who will agree for you to stick around for a bit until you’re ready to move to your new city. You can either negotiate a longer period until closing or offer to rent back your home for a few weeks.
Find a short-term rental in your new city and use the time to begin your home search.
Scenario #1: You’re selling in a seller’s market, and buying in a buyer’s market.
In some cases, there won’t be anyone to compete with, and the seller may even accept an offer that is contingent to the sale of your home (also called a “contingency offer”). This way, you won’t have to worry about paying two mortgages at the same time.
Make an offer on the house in the area you’ll be moving to. If you’re making a contingency offer, negotiate a 30-day contingency period. If not, consider using an escrow account to secure the offer while waiting for your home to sell.
Put your house on the market once your offer on the new house has been accepted.
While this is highly unlikely to happen in a seller’s market, it is wise to consider a bridge loan if it takes you awhile to find a buyer.
Not many home buyers find themselves in this position, given that most people are only capable of making a down payment on a new home once they have already sold the previous one.
However, for those who have the money, consider these:
You’ll only have to move once! No more looking around for a rental unit or storage space.
You can be more at ease knowing that you already have a home that is yours to stay in while dealing with the stress of selling your previous home.
Move into your newly purchased home and stage your previous house to sell.
Once your home sells, pay back the accounts you’ve tapped by using the money you earned from the sale.
