When it comes to buying and selling homes for sale in South Lake Tahoe, you may be wondering if you should sell first and then buy, or buy and then sell. There may be certain scenarios where buying first and selling second is a must for whatever reason. However, the experts have weighed in, and unless you have no shortage of cash laying around, the consensus is to sell your South Lake Tahoe real estate first and then buy another home. Check out these reasons why.
You may end up paying two mortgages.
In the most perfect scenario, you would manage to do both seamlessly and on the same timeline without any issues arising. However, this is real estate, and anything can happen. From buyers backing out last second to the funding falling through the day before escrow closes to a bad inspection report. This is probably a good time to mention who you work with matters. A qualified South Lake Tahoe realtor will help you navigate these issues easily. You don’t want to run the risk of paying two mortgage if the close of one of the homes for sale in South Lake Tahoe gets delayed for whatever reason. Let’s say you close on your new home and the buyers back out of purchasing your old one. You may have a new buyer swoop in immediately, or it may be a few months. So if you can’t afford to pay two mortgages, this is something to keep in mind!
You may not even qualify for two mortgages.
Thinking of testing the waters because it is your only option? Lenders won’t consider your plans to sell the home you live in now when going over your second mortgage application. Your debt to income ratio will need to fit the criteria of the loan requirements at the time of purchase. This means, your debt to income ration needs to have the ability to support two mortgages. Talk with your South Lake Tahoe realtor about this as they can best advise you.
The Market Matters
There are some real estate markets that have almost no inventory, which means homes are moving fast and with lots of competition. The South Lake Tahoe real estate market is at a 3.8 which is still considered a seller’s market. Although not super aggressive or competitive, a hot buy will go fast. This basically means that you will need to be competitive with your offer if you are living in the same market in which you are buying. If you find homes for sale in South Lake Tahoe that you really like, but haven’t sold your current home yet, you may need to put in a contingent offer. This isn’t always super appealing for sellers, especially when there are other strong offers on the table. When you sell before you buy, you can make a strong offer that isn’t contingent which gives you an edge up on the competition. Now in a market that is slower with lots of inventory, it could take a really long time to sell your home which can have a domino effect. Your current home may sit longer, resulting in you taking less money if you really need to move it. This can impact your new home purchase. Definitely work with your South Lake Tahoe realtor on this and ask what they recommend.
For more information on selling and buying South Lake Tahoe real estate, feel free to ask anyone of our qualified agents. We would be happy to help!