If you’ve ever thought about moving, you might be wondering if you can buy your next home and sell your current home at the same time. It makes a lot of sense you need the money from the sale of your current home to buy your second home, but is this even possible? Does it work and do people do this today?
Hey everybody, my name is Doug. I am a real estate investor in Philadelphia. I have a company called Signature Properties and today I want to talk to you a little bit about this concept here. If you’re thinking about moving out of your current home and into your next one and you need the equity or funds from the sale of your current home to fund the purchase of your next one, it’s not as easy as you think! Especially in today’s market! So I want to walk through a couple of solutions I can share with you and hopefully this will help you. If this is a situation you’re in and if you have any questions for me, I work out of Philadelphia, as I mentioned, but you can call me up and you can reach out to me on my website sellmyphillyhouse.com and I can kind of help you understand both of these options a little bit better, alright.
So the reason this is such an issue – especially in today’s market – is because your offer to purchase the home, if it’s contingent on the sale of your current home, is not going to be a strong offer. In fact, it’s probably not going to be accepted. Probably even if it’s full price and you meet all the terms and conditions because today’s market is very competitive. There’s going to be somebody who doesn’t have that contingency. Maybe there’s going to be a cash offer as well. So you need to think about a creative way to get around this so it doesn’t hinder you when you’re looking for a home, right? You could spend months looking on the MLS with your agent for a new home. You find the right one, you offer above asking on it, but wait you can’t afford that until you sell your current home! And so even if you started that process of selling your current home, it still takes a little bit of time and it’s going to be looked down upon by the the owner of the next home. So what are two ways to get around this?
Option 1 – Bridge Loans
One is you go out and you get a hard money loan. Now this might not be hard money, I mean this could be going to your local credit union, go somewhere else non-traditional to essentially…In fact, I’m going to call this a bridge loan, is what you’re looking for.
And it could be serviced by a hard money lender is what I was saying. Or it could be serviced by other non-traditional financial institutions. Probably not the bank that you’re looking to get a traditional mortgage from for the purchase of your next home, okay. They’ll write you an amount to cover that and then you would just be on the hook to pay that off. It’s a bridge loan, so much shorter-term transactional loan.
Option 2 – Local Investors
The second option, which a lot of folks probably don’t think about, is working with a local investor!
The benefit to working with a local investor is that nine out of ten of them are going to work with you because they want to buy your home and they want to invest in your home. So if you tell them “I’m also looking for another property and I need to time these two things to happen, you know, in parallel, closing on one and closing on the other”, they’re going to accommodate that! In fact, when you work with me, we’ll help you find the new home if you haven’t already and we’ll time it so that it closes perfectly so you get the funds you need to sell and then to buy into your next home.
A lot of people don’t look at this option right here, but it’s a fantastic option, okay. You should think a little bit more about why you would want to work with a local investor. They can give you all cash. You never come out of pocket for this. You’re going to have some fees on this this [Bridge Loans] is taking number one is taking out another loan, a bridge loan. You’re going to have some some points you pay to get it set up. You’ll never come out of pocket with a local investor, okay. They can close as quickly as two weeks, so if you’ve already started to look and you found your home and you need to sell your current one – these are your guys, right here! They’re gonna make it happen!
I hope this was helpful. I hope it makes you think a little bit differently about how to approach this situation because a lot of people are in this situation, right. They don’t have the cash laying around to just go buy one home and then sell the one they were already in.
If I could be of any help, again, my name is Doug. My company is called Signature Properties – we operate locally here in Philadelphia. We help homeowners do this, right, to get out of their homes quickly or as slowly as they need with cash. Do reach out to me. My website is sellmyphillyhouse.com. I look forward to working with you!