Homeowners Catch-22 -- To Sell and Buy or Vice Versa

Homeowners usually find themselves in a quandary when determining which must come first. Do they have to sell their current home before they can go for an upgrade? Or can they just go ahead with the purchase even if the old home has not yet been disposed?

For first time owners, the situation is simple. They can just purchase their dream home once they get their mortgage application pre-approved. If you are renting, the situation is not complicated. Once you have figured out how you can get your equity out of the rented home, you can proceed to purchase your home. Unfortunately, the situation is not as simple for homeowners, especially the first time sellers. dallas homes for sale

There are certain variables that you have to consider when making the decision. The first thing that you must consider is your personal circumstances. You must also determine how much of a risk you can afford to take. You have to look at the market conditions. Are you in a buyers market or a sellers market? Can you be able to get a bridge financing? What type of home are you planning to purchase? Is it a resale home or a brand new home? You must weigh a lot of things so that you don't end up holding an empty bag at the end of the day.

As a general rule, it is better for you to buy first when you are in a sellers market since it is easier to dispose of your current home than buy a new one. You definitely don't want to end up without a place to stay because you failed to buy a home before you vacated your old home. You must negotiate with your bank for a bridge financing for the home that you are planning to purchase. This is your safety net in case you are not able to dispose of your current home before you close the new purchase.

On the other hand, you must sell your current home first before you make the buy if you are in a buyers market since it is easier to buy a new home than to sell your old home. By then, you will be able to know your budget range and take advantage of the declining prices of real estate properties. In some cases, you may even elect to wait it out until home prices bottoms out. dallas homes for sale

The situation becomes simple if you are going to sell your current home and purchase a pre-sale. You only have to consider the delivery date of the developer and you will have to close the deal within 30 days from said date. This gives you more time to work on a good deal with your prospective buyer. In most cases, you have about three to five months to work out a deal with your buyer before you close the deal with the developer.

You can also add a clause in your agreement with the seller that will make the purchase dependent on the sale of your home. This special clause in the agreement will normally run for one to two months, depending on the prevailing conditions in the market. Under this arrangement, the seller can still offer the property to other interested buyers within the period covered by the time clause. If he receives an offer that is acceptable to him, you will then have to meet the subject clauses within 24 to 48 hours or give up your right to purchase the home. It is under this situation that bridge financing is very essential. dallas homes for sale