LAKE HAVASU CITY PROPERTIES
CAUGHT IN BETWEEN SELLING AND BUYING A HOME?
Sometimes
selling a home and buying a new one can be a difficult balancing act,
as a homebuyer often cannot place an offer on an attractive home and
sell the current one simultaneously. These homebuyers and sellers get
“caught in between.” Below are some tips on how to close that time gap
between buying and selling a home.
Consider bridge loans. A
bridge loan means borrowing from the current home’s equity until the
proceeds from its sale are obtained. Some bridge loans require that
only the interest be repaid; others mandate a single payment of
interest and principal when the loan needs to be paid back. If
protracted, bridge loans can be expensive, so it is best to use them
for overlaps of a short period of time between closings.
Buy on contingency.
Have a prior-sale contingency included in the purchase contract of the
new home. It provides the opportunity to withdraw from an offer if the
current home does not sell by a certain date. This will also guarantee
in most cases that your earnest money deposit you placed on the new
home will be refunded to you.
Evaluate whether to buy or sell first.
You might still get “caught in between” even with a prior-sale
contingency clause. Homeowners must consider which is better to do
first. In a “seller’s market,” locating the new home and starting the
buying process may be the best approach. It is important to note that
most people need to sell their current home in order to qualify for a
loan to buy the next one, which is often more expensive.
Review home equity options. For
those who need to borrow for a longer period than just a few months, it
is best to use a home equity loan or a fixed-rate line of credit,
particularly if sizable equity has been built up.
For buying or selling real estate in Lake Havasu City, call Dean Baker Owner/Broker Lake Havasu City Properties, 16 years experience, over 600 homes sold in Lake Havasu.
Cell phone 928-486-3368or (888) 854-7210.