Are you thinking about buying and selling your California home at the same time? It’s a little bit tricky to figure out how to do both simultaneously, but it can be done, and we can help you do it!
Tips for Buying and Selling a California Home at the Same Time
California’s real estate market has historically been stable to strong, and 2020 is not an exception. So many homes are up for grabs, especially in urban areas like Los Angeles. Even first-time homebuyers have a good shot at landing an excellent deal, especially if they get sound financial advice.
However, anyone who attempts to buy or sell a home simultaneously needs juggling and strategizing. Here are some things to try if you want to land your dream home as you sell your current one.
Consider making a contingent sale offer
If you have found a home you really want but have not yet closed a sale on your home, you can try making a contingent home sale offer. This offer allows you to make the down payment on your new residence provided that you close the sale on your old one.
For most sellers, contingent sale offers are less than ideal. It is because these types of offers carry plenty of risk factors beyond their control.
Opt for a contingent settlement offer
If you expect to get offers on your first home quickly, you can make a contingent settlement offer. This type allows you to write into the agreement that your first home needs to settle so you can buy the new one.
Seek extended closing
Getting an extension on your closing allows you to sell your current residence and buy a new one quickly. However, all parties must be on board; the seller, buyer, and agents must be fine with extending.
Apply for a mortgage loan
For people who want a straightforward solution, you can try a home equity loan. This method allows you to take cash out of your current home through a HELOC, or home equity line of credit. This is money you can put as a down payment on your new home.
Home equity strengthens your position since the loan is paid when you sell your previous residence. Note, though, that the rules for loans have changed since the start of the pandemic. It is best to consult a California mortgage broker about this.
Get a bridge loan
Another financing option is taking a bridge loan, a short-term loan that covers your down payment until your old home finds a buyer. It uses the current home as collateral for the loan. Some bridge loans have monthly installments, while others stipulate lump-sum interest payments. With a bridge loan, you do not need to worry about lags in closing dates—you essentially own two properties at once with this type of solution.
Put in a rent-back provision
Sometimes, you have a buyer for your current home but have not secured a new home for yourself. Ease yourself through the transition by putting a rent-back provision in your contract. A provision like this lets you close on your old home but rent it back from the new owners for a short period. This solution will work well in the city’s current real estate environment.
Conclusion
Changing homes is an exciting prospect, but it also requires a lot of planning from you. If you find yourself selling your old home and buying a new one at the same time, you can try these tips and tricks and see which is the best fit for your situation.
Buying a home and securing the best home loan for it is so much easier with Lend LA. We are California mortgage brokers focused on giving homeowners the best professional advice they need to find the home of their dreams. Call us today for more details!
