Which Option Is Best For You? Below are four potential options for selling your home and buying another in today’s market. There’s pros and cons with each options. Check out below to see which might work best for you. Reach out here if you have any further questions.
Option One: Put your house on the market and ask for a rent back while you look for your next home.
Pros:
- You have cash ready and available to purchase your next home and compete.
- This strategy works exceptionally well if you’re in the first-time home buyer price point, as people buying this type of property are usually renters, so they can be flexible on when they move in.
Cons:
- Quick turnaround. At most, you have about 60 days to find a property. An inventory shortage in this market can make this a challenging option. On the other hand, this could be a good option if you’re not picky or open to remodeling.
Option Two: Use an equity line of credit from your current home.
First, find your replacement home, and don’t start paying interest until you do so. Then put your current house on the market and pay off the loan once you’ve closed, or rent your existing home and start that wealth-building game!
Pros:
- You are essentially a cash offer.
- Time to find the right place.
Cons:
- You are only allowed to take 80% equity. This is where saving for the next down payment would be handy, or liquidating stock assets would help.
- It takes 4-6 weeks to process your application and receive your line of credit.
- Most likely will have to pay for an appraisal.
Option Three: Sell your current home and rent while you find your dream home.
Pros:
- Not on anyone’s schedule but your own
- Stronger buyer as you have your cash on hand.
Cons:
- Have to move twice.
Option Four: A contingent offer. This means putting an offer on your replacement property contingent upon your current home selling.
Pros:
- You don’t have to move twice.
Cons:
- Hard to get a contingent offer accepted in this market if you’re competing against noncontingent offers.
- Have to have your home ready quickly to list on the market. This only works if you already have a home that doesn’t need much work to get on the market.
- Less room for negotiating with the buyer on your current home as you need to sell quickly
- On a timeline with the seller of your dream home. A chance of losing your offer if you don’t sell within the offer timeline.
