The Advantages of Selling Your Home before Buying

Selling your home before buying a new one is highly recommended by mortgage counselors and financial advisers. If you buy a new home without first selling your old one, you may end up having two mortgages. This can be hard to maintain, especially if you are raising a family or you have other obligations and debts to pay. Although you risk being homeless if you decide to sell before you buy a new house, it can be easily remedied by renting an apartment temporarily. Here are the biggest benefits of selling before buying a new house.

Allows Easy Budgeting for a New Home

One of the most important benefits of selling your home before buying a new one is that you will have a better idea about how much you can spend for your new home. Knowing your budget beforehand will lower the risk of overspending and buying a house that you cannot afford. If you have an idea as to how much you can spend, you would not feel afraid or unsure about shopping for a new home because you would know what price level is right for you.

Besides, if you furnish the bank or the mortgage counselor with revised information that reflects your financial standing after you have sold your home, you can easily prequalify for a new home loan. Prequalifying simply means that your mortgage provider will entitle you to a predetermined amount of mortgage which you can easily take advantage of.

Simplifies and Speeds up Search for a New Home

Searching for a new home that fits your preferences can be hard, especially if you are not sure about your budget. If you have already sold your old home and know exactly how much you are capable of spending for a new one, the time that it will take for you to find a new place to live in will be shorter and easier because you can effortlessly narrow down your search.

Gives You More Room for Negotiation

Another advantage of selling your home first before buying a new one is that you will have more room to negotiate with the buyer. You will not be pressured to accept the offer or the payment terms of the first buyer that comes to your door because you do not have a second mortgage to think about. On the other side of the coin, if you buy a new home before selling your old place, there is a tendency to take the first offer you get just so you can convert your old property into cash fast. This is especially true in a buyer’s market, where there are more home sellers than buyers.  

Results in a Higher Selling Price

If the buyer knows that you are not desperate to close the sale, he will be more than willing to accept your sale price if he is really interested in buying your home. But if you advertised that you want a rush sale, then buyers will have a reason to ask for huge discounts. More often than not, desperate sellers are forced to accept a selling price that is much lower than what they ask for.

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