So you’re thinking of buying a Lake Tahoe home….and selling at the same time? It is a little different compared to when you were a first time buyer and didn’t have another mortgage to think about. In a perfect world you could buy a home and then have the home you are selling get snatch up by a full price buyer as soon as you get unpacked and comfortable in the new digs. While this process isn’t the most desirable way to go, sometimes it is the only way to go and you can get through it with some helpful tips and of course a qualified Lake Tahoe realtor.
First thing is first-you must know the market. This is crucial before you can put your home on the market, or start searching for another Lake Tahoe home to buy. Before you can come up with a game plan, you need to know if the market is a buyers or seller’s market. Knowing this information will help you know what to expect on both sides and help you understand the importance of pricing your current home properly. After all, who wants to pay 3 months of double mortgages because you had your home priced too high in a buyer’s market?
Speaking of the game plan, schedule your strategy carefully. Know both the risks and rewards of buying first and then selling, or selling first and then buying. Buying first can throw off your debt to income ratio which could be a hassle when trying to qualify for another mortgage loan. You also run the risk of more than one mortgage payment for a few months. On the plus side, moving is a lot easier. Now if you sell first, you can rest assured getting a mortgage will be easier but then you will most likely need to find a temporary home to rent and deal with moving multiple times in just a matter of months. Also remember, you are not the only one in this deal. You have to keep in mind that you are going to be negotiating with a buyer and a seller and their timelines as well.
Now let’s talk money. You must be aware of our financial options if you choose to sell first. We have seen a lot of Lake Tahoe sellers and buyers do a rent back agreement. This is where the seller negotiates a time period after close of escrow where they can stay at the property and pay rent to the buyer. The typically time period is 1-3 months but it allows a little bit of leeway on finding another property and hopefully not having to move multiple times. If you are buying first, you also have some options. There is a bridge loan which is a short term loan that allows you to own two homes at the same time and needs to be repaid upon the sale of the first house. You can also do a contingency on the contract. This is when the purchase of the new home is dependent on the sale of the old home. If the market is competitive, this may not work out in your favor, however it is an option worth looking into.
Another key thing to keep in mind is do not let anxiety or stress motivate you into compromising things simply because you have to find a home as soon as possible. You also do not want to take an offer that is too low because you are feeling the burden of two mortgages. While simultaneously selling and buying can feel overwhelming, it is not the end of the world. You can cut down on a lot of the head ache by making sure you have a reputable Lake Tahoe Realtor who can walk you through the process. Make them aware of the game plan and make sure they have a finger on the pulse of the market. If you are looking to sell and buy at the same time, call our office at 530-543-6676 to discuss your options.