Don’t worry, you won’t, as long as you take the time to think things through. Depending on your particular situation, it may make more sense to buy first, then sell — or just the opposite. Either way, here are some of the factors to consider:
Buy First, Then Sell
- Can search for new home without pressure
- No need to find interim housing
- Risk of double mortgage payments
- Equity from current home unknown
- Equity is immediately available
- No double mortgage payments
- Risk of having to find interim housing
- Pressure to buy can lead to rash decisions
Clean It Up
- Get rid of stuff. You don’t want to be hauling junk to the dump while the clock is ticking.
- Fix what you can. If necessary, hire an inspector to determine what needs doing and get it done. Quibbling with potential buyers over who’s going to pay for what is counter-productive.
- Disclose what you don’t — fix, that is. If you don’t want to take on a major repair, be sure to disclose the problem to the buyer. It may be better to accept a lower offer than to have the deal fall apart.
Tools of the Trade
You can also structure your deals to include contingency clauses, in which you agree to sell your current home contingent on purchasing your new one and/or agree to buy your new home contingent on selling your old one. Just be aware that most sellers prefer contingency-free offers: If your offer is contingent on selling your current home and a competing offer has no such constraints, many sellers will go for the free-and-clear sale.
The Reality of Rent-backs
The problem, of course, is that the buyer calls the shots. They’ll probably want you to cover their mortgage payment and other costs, which, assuming your house has appreciated, are probably quite a bit higher than you’re used to paying. Add in the utilities, renter’s insurance, and other expenses, and it may make more sense to find a rental apartment — or redouble your efforts to find your new home.