Selling a house in Portland and planning to buy another home is exciting but overwhelming! The biggest question is where are you going to live if you sell your house. I’ve helped many people navigate this situation, and there are a few strategies to consider.
Buy First Strategies
Buying first allows you to sell your house more conveniently with no uncertainty about where and when you could move. A few options are:
1. Buy with cash. If you can do that, problem solved. It may even make sense to utilize funds in an investment account, but think that through with your financial advisor first.
2. Use a standard mortgage. If you can be pre-approved to buy another home before you sell your house, a regular mortgage could be the simplest strategy. A down payment and two monthly payments for a while will be expensive, but it could be more straightforward than other options.
3. Use a “power buyer” loan or bridge (short-term) loan to buy another house. There are now several companies that will help you buy a second house in a very convenient way and maybe even lend you money to renovate your old house before you sell it. Once you do sell your first house, you pay off the short-term loan and have a standard mortgage. In other models, the company buys the home you want (for cash), you move in as a renter, sell your first house, then use a mortgage to buy your new house (no bridge loan necessary). Check out Homeward, UpEquity, and Knock.
Sell First Strategies
Selling your house before buying is more common, and by selling first, you’d know exactly how much money you’ll have available when you buy. However, figuring out where to be after you sell before you move to a new home can be tricky. You might not want to be in a rush to find a house to buy and limit yourself to what’s on the market in a two-week period, for example. In strategies 5-7, it would still be wise to have a plan B in case anything goes wrong in your purchase transaction and you find yourself having sold your house without a house to buy. Here are a few ideas for selling first, and some of these strategies can be used together.
4. Sell and then stay somewhere else for a while. “Somewhere else” could be with family or friends, a hotel or vacation rental, an apartment, or a rental home. This allows you to be patient while you search for your next home and not be constrained by pressure to find housing. If you do get an offer accepted to buy a home shortly after accepting an offer to sell your house, maybe you’ll only need a few days. There are other resources such as moving companies that offer free storage that may make things easier too.
5. Only sell if you get a “rent back.” You could tell buyers upfront that you require a certain number of days to rent your own house after you sell it. This allows you to get your net proceeds and pay off your mortgage so you can qualify for your purchase. You can also ask for a longer than normal closing timeline to limit how many days you’d be a renter. However, if you don’t find the right home or something goes wrong in your purchase transaction, your rent back could run out before you have somewhere lined up to move to.
6. Make an offer to purchase contingent on selling your house. This is common, but in competitive real estate markets, it may be difficult to get a seller to accept your contingent offer. Typically, how this works is a seller would give you a certain number of days to accept an offer to sell your house. If you don’t sell in that time, they might cancel the sale. If you aren’t going to list your house for sale before making an offer to purchase, you could have everything ready to go with your real estate agent (professional photography, listing price, listing details), so that you could begin advertising your house for sale as soon as your offer to purchase is accepted. Being ready like that also increases your chances of having a contingent offer accepted.
7. Only sell your house “subject to finding suitable housing.” You could list your house for sale and solicit offers that will give you a contingency to cancel the sale if you don’t find a house to buy or if your home inspection (on the purchase) goes poorly. This deters many potential buyers, however, so it’s challenging to sell a house with this strategy.
Do you think any of these strategies might work for you? Let’s chat about your options!
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