You’re ready to search for Minnetonka homes for sale to find the perfect new place. However, you also need to sell your current home. The process of buying and selling a home at the same time can be challenging, but with proper planning, the right financing, and the right real estate expertise on your side, it can be done smoothly.
One of the biggest challenges when buying and selling is timing. If you buy a new house before selling your current one, you could end up with mortgage payments and maintenance costs on both properties. On the other hand, if you sell your house before buying a new one, you could be left without a place to live in the meantime.
To overcome these challenges, it is crucial to have a solid plan in place. This may involve obtaining the right financing, strategically pricing your home for a quicker sale, and being prepared to negotiate effectively. By taking these steps, it is possible to time the sale and purchase of your home in a way that works for you. With careful planning and the right strategies, you can achieve the ultimate multitasking feat of buying and selling a home simultaneously. Read on for expert advice.
Planning prevents mistakes
Buying and selling a home at the same time requires a lot of work, so it's important to start preparations as soon as possible. The more planning is done, the less likely you will encounter significant mistakes.
Selling preparations
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When it comes to selling your home, it's wise to consult with an experienced listing agent. They can provide expert guidance on getting your home ready to sell, which will likely involve repairs, decluttering, and cleaning. It's also recommended to have professional photographs and videos taken of the home to be ready to list when the time comes. Preparing these materials in advance is highly advised so you can move quickly.
Purchasing preparations
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One of the most important things to do when buying and selling a home at the same time is to make sure your finances are in order. The pre-approval process is essential because lending guidelines are constantly changing. To be competitive in today's housing market, you will need to either have the cash ready to buy the new home outright or be fully pre-approved for a mortgage to make strong offers.
Money matters
When selling your current home, the proceeds will usually be used to pay off the mortgage and put any remaining money toward the next property. However, before the sale closes, you will need to come up with the money for a down payment and have financing set up to purchase the next home.
Two popular options are a home equity line of credit (HELOC) or a bridge loan. It's essential to plan ahead and research all the options available to find the best fit for your financial situation.
1. Home equity line of credit
A home equity line of credit (HELOC) is a type of loan that allows you to borrow money using the equity in your home as collateral. This can be a useful option when buying and selling a home at the same time, as it allows you to access cash for a down payment on a new home while you are still in the process of selling your current home.
When you apply for a HELOC, the lender will evaluate the value of your home and the amount of outstanding mortgage debt. Using this information, the lender determines your credit limit, which is the maximum amount you can borrow. You can then access this credit line as needed, usually by writing a check or using a credit card.
One thing to keep in mind is that you will need to have the HELOC already in place before listing your home for sale, as lenders typically won't approve a credit line after you've put your house on the market. This means that it's important to plan ahead and apply for a HELOC early in the process to ensure that you have access to the funds when you need them.
2. Bridge loan
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A bridge loan is a short-term loan that is used to "bridge" the gap between the purchase of a new home and the sale of the borrower's current home.
Bridge loans typically come in the form of a second mortgage. They allow borrowers to borrow up to 80% of the value of their current home to pay off their existing mortgage and put the remaining money towards the down payment on a new home. The loan is interest-only, and the term is usually for a year, but it is paid off quickly because it is meant to fill a short gap between the sale of the current home and the purchase of the new one.
It's important to do your research and consult with a financial advisor or mortgage lender to determine whether a bridge loan is the best option for your specific situation.
Buying and selling in Minnetonka
Buying and selling a Minnetonka home at the same time can be a daunting task, but with the proper planning, financing, and strategy in place, it is definitely achievable. Of course, it is always best to consult a professional before making any significant financial decisions.
If you're looking to sell your home and buy another one in the Minnetonka area, the expert real estate agents of the
Laura Tiffany Group can help you navigate the process without all the stress. With the team’s top-notch market knowledge, they can help you find the best financing options and the perfect
Minnetonka homes for sale. With their help, you can rest assured that you'll be able to make a successful transition from one home to another. Get started today.
*Header photo courtesy of Shutterstock
