Real Estate

Buy Before You Sell

Homeward Cedar Park

Many times this is an overwhelming prospect for homeowners looking to upsize, downsize or relocate. Buy Before You Sell can be a tricky process. How do you buy a home when you have a home to sell and need that equity to purchase the new home? The financial aspects can be challenging, as well as the timing.

In the recent market, sellers were able to negotiate leasebacks for the sale of their home, meaning that a buyer would close and then allow them to stay in the property for up to two months while they locate another property. This was offered by buyer to sellers in order to make their offer stand out among other competitive offers. Many times sellers were able to stay for free too!

The market is changing fast and it is becoming less attractive for buyers to offer leasebacks to sellers, especially free leasebacks. So if you are thinking of selling and expecting to get a free leaseback, you may find it’s not being offered, especially if you don’t get multiple offers.

One option to accomplish a smooth sell and buy transaction is to utilize the services of a “Bridge Loan” company like Homeward, Orchard and others.

In simple terms, companies like Homeward will purchase your new home for cash and you will lease it back from them until you sell your old home. Once you are approved for the program, you will find a new home and close on your new home – with Homeward as the buyer and you as their tenant. You still own your old home and must sell it. Where it gets tricky in this market is that you only have a certain amount of time to sell your old home, or else you have to sell it to them at a lower price or pay higher fees. Generally all of these types of service companies, conditions and prices are spelled out ahead of time. If you encounter a company that does not disclose all this upfront and leaves you to sift through the fine print, beware.

There is a cost for this convenience of course. Generally around 2% of the purchase price of the new home. Sometimes it makes sense financially and sometimes it doesn’t. And there are other considerations when selling and buying, such as increased property taxes on the new home and possibly giving up your low interest rate on our current home.

With Homeward and others, there is a qualification process to utilize the program. They will need to evaluate your current home’s value, how much equity you have and your financial qualifications. There are some stipulations on the new home value and location too.

Give me a call if you’d like to meet to discuss this option and other option. There are many considerations when deciding to make a move. But that’s what I’m here for, to help you navigate the whole process. Let’s meet to discuss. I’m here to help.

Here’s how the Homeward program works for Buy Before You Sell. Other programs are similar, with varying stipulations and fees.

Homeward Buy Before You Sell Texas

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