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Are you thinking about buying and selling your California home at the same time? It’s a little bit tricky to figure out how to do both simultaneously, but it can be done, and we can help you do it!
Buying and Selling Your California Home at the Same Time Takes Expertise
The California real estate market is HOT, but with an inventory crunch, buying and selling a home requires strategy. So, what are your options to secure your dream home while selling your current home? Well, we’re here to help!
Make a Contingent Home Sale Offer
A contingent home sale offer is based on the sale and closing of your existing residence, which provides the funds and down payment for your new residence.
The plus side is that if the sale of your current home falls through, it would give you an out on the home you are under contract on.
The downside is that in markets where there is a shortage of inventory (like ours), contingent offers are not ideal for sellers. In a multiple offer situation, this type of offer would likely not be favorable to the seller because it has variables outside of the seller’s control.
Make a Contingent Settlement Offer
With this option, your list your home first and get an offer. Then, you start looking for a home and can put in an offer (even though your first home hasn’t yet closed). You can write in a contingency that the first home needs to settle for you to be able to buy the new home. This works best if you expect to get offers on your first home quickly
Request an Extended Closing
Request an extended closing—which will give you enough time to sell your current home and buy another house. Of course, all parties have to be on board with the extended closing time, so your mileage may vary with this option.
Home Equity Loans
If you don’t want to mess around with contingencies or an extended closing, which require all parties to agree, there are some other financing options we can help you with.
One of those is to take out a home equity loan (although there have been some changes to home equity loans since COVID-19, they’re still available, and we can help you find one).
Essentially, you take cash out of your current home in the form of a home equity line of credit (HELOC) to put a down payment on your new home. This loan gets paid off when you sell your current home.
This strategy helps make your offer STRONG in a market where standing out is essential!
But there are still some things to take into consideration if you go this route, so it’s important to consult your trusted mortgage experts at New Way Mortgage before getting started.
A bridge loan is another financing option when you’re buying and selling your California home at the same time. It’s a short-term loan offered by a bank to cover your down payment until your old home closes; it uses your current home as collateral. It’s designed to be repaid in the short term. They have various repayment terms; some have monthly payments while other require lump-sum interest payments.
A bridge loan helps you tap the equity in your current residence as a down payment while essentially owning two properties concurrently. It can really help get you through if there’s a lag in closing dates on both homes, as well.
One other option is a rent-back provision, which allows you to close on your old home but rent it back from the new owners for a short time after closing. This works best in a seller’s market, where buyers have to be more flexible with terms to get the home they want.
Ready to move out of your old home and into a new one? No matter what your situation is, we’re here to help you find the financing to make your dreams of a new home happen in our current market. Just text or call us at (916) 465-6639 or go here to get started!