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How To Buy A New House When You're Selling Your Own

Buying A House When You're Selling Your Own - House for sale

Real estate is a very local business, but in recent years buyers and sellers across the country have faced the same challenges. When interest rates dropped to historic lows in 2020, a homebuying frenzy ensued. Bidding wars were the norm and many buyers waived their right to an inspection. Then, as interest rates began to rise in 2022, home sales slowed down but inventory remained low. In Arkansas now, the number of homes for sale is up 8.8% from the previous year and the median sale price is up about 2% year-over-year. And, in Missouri, there are about 10% more homes for sale this year than last. The median sale price is up about 6%. Rising inventory is a good sign for buyers, but when you’re trying to sell and buy at the same time, there are unique challenges. You have to consider factors such as cash flow, how to make a down payment on your new home, current market conditions, and more. In this guide to buying a new house when you’re selling your own, we’ll walk you through the process and offer tips to make it easier on you.

Consider the biggest factors first

Before putting your current home on the market, consider the following:

  •  Are you staying in the area or moving farther away?
  • Do you have somewhere to store your furniture and belongings if you need to?
  • What are the buyer’s and seller’s markets like right now?
  • Are you doing this out of necessity or desire? If the latter, can it wait until conditions improve?
  • What are your current finances like? Take stock of your cash reserves, debt-to-income ratio, closing costs, and current mortgage.

Shop around for a good real estate agent

When it comes to selling your home, you want an experienced agent who can advise you on any changes or repairs you should make before listing, get you the best possible price for your home, and get it sold as quickly as possible.

As for buying a home, a good buyer’s agent will know the local market well, can tell you about up-and-coming listings, and will help you get the best possible deal on your new home.

To find the best real estate agent for you, ask friends and family for referrals. Look up agents online to see their active listings and recent sales. This will help you determine who is successful and experienced in your area. Agents will want you to sign a listing or buyer’s agent agreement before they start working with you, but that doesn’t mean you can’t meet with several before making a choice.

Prepare your home for sale

Timing it perfectly would be ideal, but many people need to prioritize selling their current home before they can make an offer on a new one.

To prepare your home for the fastest possible sale, ask your real estate agent what needs to be done (and what you don’t need to worry about).

Consider paying for a home inspection before listing. You can share it as an added benefit for buyers and it will also let you head off any issues that may lead to a lower sales price.

Finally, check off the basics like decluttering, removing personal photographs and artifacts, and giving your space a good clean. You may also want to repaint some rooms in a neutral color if it’s been a while or the current colors aren’t universally appealing.

Understand your financial situation

We recommend getting pre-approved for your next mortgage before you begin the process of selling your home. This will help you understand how much you can afford to borrow and spend on your next home. Getting pre-approved will also let you know if you need to sell your current home first before buying your next home.

A pre-approval letter will also help you with sellers when there is more than one offer. Getting pre-approved is a fairly simple process–you just need to provide some basic personal and financial information.

Get preapproved for your next mortgage before you begin the process of selling y our home - Couple looking at mortgage paperwork

Determine your down payment

Depending on the type of mortgage loan you get for your next home, you may need to put 20% down or you may be able to make a smaller down payment. Unless you can draw from cash reserves to make a down payment, it will be tied up in your current home. Take into account that you’ll have to pay off your current mortgage with the sale of your home. Will there be enough left after that for your down payment and closing costs on the next home?

Start looking for and time the purchase of your next home

A great real estate agent can be integral to the buying and selling process, but if you’re moving out of the area you’ll need to find a local agent in your new town. Ideally, you can time the sale of your house and the purchase of you new house perfectly, but you should also prepare for the worst-case scenario. Your current home might sell faster than you expect or you may not be able to find a suitable new home in time. Consider temporary housing solutions like staying with friends or family, or in a short-term rental.

Get pre-approved for a new mortgage loan today!

Moving is always stressful, and buying and selling simultaneously can be extra stressful. However, it isn’t always possible to buy first and move before selling, or to sell first before buying. Plenty of people have pulled off the balancing act of buying a home when you’re selling your current house and you can, too. A good real estate agent and mortgage lender can guide you through the process. Explore our home mortgage loans, download our loan application checklist, and contact our Northwest Arkansas and Cassville, Missouri-based mortgage lenders to get started!