What you Should Know About Buying a Home Contingent on Selling Yours.
Is buying a home contingent on selling yours a strong offer?
Simply, this means you have a house to sell and you cannot buy another until you have sold yours. In other words, you are making an offer to a seller subject to the sale of your home.
This is the least desirable situation you can be in as a buyer.
It gives you the least negotiation room and offers you little clout as a buyer. Many sellers will not even consider contingent offers because they do not want to remove their home from the market while they wait in anticipation of your home selling. After all, they do not know what condition your home is in, whether it is priced to sell, or if it is in a desirable location-all key factors when selling a home.
If you must sell your home in order to purchase, it is important that your home is ready to market, and even better, if you have a pending offer on it.
Once you have a pending offer, you now have a closing date. When you find your dream home, you simply set the closing date for the following day or two and you will be able to cover your closing costs and down payment from the sale of your home, eliminating the need for a bridge loan. Remember, you must have the cash at your closing, cash that is coming from the sale of your home.
Bridge Loans! What are they and how do they work?
The other option that may be available to you is a bridge loan. This is a tool used every day by contingent buyers. They are simple and easy and cost you absolutely nothing unless you execute it. They can protect you in the event another buyer tries to "bump" you. They basically loan you money against your equity to cover the closing costs of your new purchase until your home sells. Then you reimburse the lender with proceeds from your sale.
Have a question about your unique situation? Feel free to contact me and i'd be happy to help.
Austin Schneider | firstname.lastname@example.org | Realogics Sotheby's International Realty