Buying While Selling? Tips on Juggling Two Escrows
Buying a new home is often one of the most exhilarating events anyone experiences. But this excitement can be replaced by anxiety for buyers who are selling a home at the same time. Buyers who are purchasing a new home while selling their previous one try to close on both properties at the same time to ensure a smooth move. Although all parties may have the best of intentions, the properties may not close concurrently. Buyers fear the idea of paying for two mortgages or moving at a difficult time.
What can home owners do to mitigate this problem?
Many borrowers do not think of buying and selling a home as one full transaction, and therefore, they tend to think of the "buy" and then they are chasing the "sell." I recommend several strategies to people who are buying and selling a home at the same time. If a buyer plans properly, he or she should be able to ease out of the old home and into the new one without too much difficulty.
Selling Strategies
People should first find a qualified real estate agent and a mortgage expert. A mortgage loan consultant such as myself will pre-approve prospective buyers. As a seller, you should negotiate only with buyers who are pre-approved to purchase your house. And, have the loan consultant pre-approve you. As a buyer, you want to know how much house you can afford, so you can present yourself to sellers as a qualified buyer to purchase the house you want.
It’s important to allow extra time in the home buying and selling schedule if you are buying and selling at the same time. This advice seems obvious, but list your house for sale long before you plan on buying, if possible. When you get an offer, negotiate the escrow period to accommodate your purchasing needs. If that’s not possible, ask to rent your previous house if you haven’t closed on your new one – then you won’t have to move twice.
Sellers may be able to mitigate their concerns by accepting a lower offer that allows more flexibility on the closing date. For example, if the high bidder has to sell his or her house first, you might be better off selling to a first-time homebuyer.
Buying Strategies
If you are planning to buy in a competitive market, you may need to make your purchase before selling your current home. In this case, there are common and necessary contingencies that should be included in a purchase offer. For example, consider adding a clause stating that your offer is contingent upon the successful sale of the property you currently own. This contingency prevents the buyer from forfeiting their earnest money deposit, or making two mortgage payments at once.
I believe that there is no substitute for an informed borrower. Whether you've just found your dream home, want to check today's rates or would like to learn about the various home lending options available to you.
Brad Hacker
Mortgage Loan Consultant
Washington Mutual Bank, FA
San Antonio, Texas 78230
210-877-8619
Source: www.articlesphere.com