This article discusses sell my house - buy a house - buying or selling a home. First, here are two quick tips:

1. You can often negotiate a lower sale price by employing a buyer broker who works for you not the seller. If the buyer broker or the broker's firm also lists properties, there may be a conflict of interest, so ask them to tell you if they are showing you a property that they have listed. See sell my house for more information.

2. Do not purchase any house until it has been examined by a home inspector that you selected.

There isn't any quick answer to the question of whether to sell your home first or buy another first. Too much depends on market conditions in your area and on your individual circumstances. Consider several key factors first.

If you sell before you buy:
When there's a seller's market, you have a strong bargaining position. Negotiate for time with the buyer. If your bargaining position isn't strong, delay the closing a few months by making a price concession.
If the buyer must close the purchase right away, ask him to rent the house back to you until you are able to move. To calculate whether it makes sense to pay rent on your own home: Compare the cost of living in temporary quarters, such as a motel. Then, factor in the cost of moving twice plus the storage costs on furniture and other belongings that you will have to pay.

If you buy before you sell:
When there's a buyer's market, the seller might be flexible about the closing date. Consider offering the seller a short-term note, secured by a second mortgage on your present home, to cover the down payment on the new place until the old one is sold.
A bridge loan can sometimes provide the cash for a down payment on a new home before you close on the old one. But banks usually require that you have a contract of sale on your old home, unless you or your broker have a very strong relationship with a local bank. Banks also want assurance that you have enough equity in your old home to cover the loan and some sort of escrow arrangement to make sure the loan is paid off when the sale of your old home is closed. Rates for a bridge loan: V2 % to 1 % above the prime, subject to local rate limitations.
Consider renting out a newly acquired home until your old house is sold and you are ready to move in. Of course, you will have to keep the rent low, since you can only offer a month-to-month tenancy.

To Sell My House - Buy a House - Buying or Selling a Home - Top

Tax break: Otherwise nondeductible expenses, such as depreciation on the house, can be used to offset the rental income. But aside from interest and taxes, do not write off expenses that exceed rental income. Bear in mind that you are not renting the house as an income-producing property, but as a convenience.
Caution: You should not treat the house rental as a profit-oriented activity in order to boost your deduction. Reason: When you sell one home and buy another at a higher price, you can defer the tax on your gain. To qualify, the two transactions have to take place within 2 years, and both the old house and the new one must qualify as your primary residences. Should you turn the new house into income property before you move in, you could lose this tax break.
Optional solution: You might be able to nail down a deal on a prospective new home without actually taking title to it, and then take your time about selling your old one.

Here's how:
First, locate the house you want to buy.
Work out acceptable terms with the seller. Then, offer to pay the seller for an option to purchase the house on the terms you have already worked out.
To decide how much to pay for such an option: Compare the cost of your alternatives. How much would it cost to rent temporary quarters, store property, move twice? What would it cost to carry a bridge loan (interest, recording fees, service charges, etc.)? How much of a price concession does your broker think you would have to offer to get a potential buyer of your home to be flexible on the proposed vacancy date?
If the seller is hesitant about offering you an option, point out some of the advantages to him:
If you exercise the option (which you are likely to do), he gets to keep the option fee plus the agreed-upon price.

If you let the option lapse, he keeps the fee and still gets to sell the house.
If the seller is concerned about appreciation in real estate values between the time you purchase the option and the time you exercise it, it may be worthwhile to build in an escalator clause. This could be a flat-rate clause, raising the purchase price by say, Y2 % for each month. Or it could be tied to a mutually acceptable price index.
An option arrangement gives you maximum flexibility in selling your old home. Knowing you can purchase a new home on agreed-upon terms makes it easier to evaluate the offers you get for the house you are trying to sell. In addition, there's a tax break: Later on, when you eventually sell your new home, the option cost is added to the purchase price to offset against any gain on the sale.

Selling a house can be a problem when the potential buyer makes the deal contingent on the sale of his own house. After months of waiting, your deal may fall through.
Solution: Include a kick-out clause in the sales agreement. This enables the seller to keep the house on the market until the sale is completed. If another buyer makes an offer, the original buyer has 48 hours to decide whether he wants to buy the house or not.

Source: Consumer Information Center

Disclaimer: While every effort is made to ensure that the content of this website is accurate, the website is provided “as is” and Bizmove.com makes no representations or warranties in relation to the accuracy or completeness of the information found on it. While the content of this site is provided in good faith, we do not warrant that the information will be kept up to date, be true and not misleading, or that this site will always (or ever) be available for use. Nothing on this website should be taken to constitute professional advice or a formal recommendation and we exclude all representations and warranties relating to the content and use of this site.