How to Buy a House and Move When Selling in Maryland
Disclaimer: This blog post provides general information on Maryland real estate and is not personalized advice. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for personalized guidance regarding your unique situation.
Are you considering buying a house in Maryland?
Perhaps you already own a home but are looking to sell and move into a new one. Whatever your situation may be, buying and selling a house in Maryland at the same time can be a complex process.
According to a recent study by United Van Lines, Maryland ranked as the 10th most moved-from state in 2020. That means a lot of people are relocating from Maryland and selling their houses in the process.
Even if you aren’t moving out of state and are simply relocating to another town or neighborhood in Maryland, moving and selling a house can be a challenge.
In this article, we will explore the steps involved in buying a house and how to move and sell your current home in Maryland.
Table of Contents
How to Buy a New Home Before You Sell Your House
First, determine your financial readiness. Calculate how much you can afford to spend on a new home without relying on the sale of your current house. This way, you won’t have to rush the selling process and can negotiate a fair price when you do sell.
Next, consider obtaining a bridge loan or a home equity line of credit to cover the down payment on your new place, using your existing home as collateral. This will give you the necessary funds to buy your new home upfront while allowing you more time to sell your current house.
It’s also important to work closely with a real estate agent who specializes in buying and selling homes simultaneously. They can help navigate the process, coordinate timing, and ensure a smoother transition.
Lastly, be prepared for the possibility of temporary housing if your current house sells before you find your new home. Renting or temporarily staying with family can alleviate the pressure of needing to rush into a new home purchase.
How is it possible to buy a house before selling your old home?
Buying a new home before you are able to sell your home first is possible, but it comes with certain risks and considerations. If you need a mortgage to purchase a new house, banks may be have additional stipulations if you have an existing mortgage on your current home.
However, if you meet common lender financing requirements, obtaining a second mortgage to buy a new house before selling your current home should be an easy “walk in the park.” Though, some lenders will require that your old house is sold or that the mortgage is paid off before they will consider issuing a loan for a new home purchase.
What are the risks of buying another house before selling?
The most significant risk is carrying two mortgages simultaneously, which can strain your financial situation. If your current home takes longer to sell than expected, you may have to make two mortgage payments every month.
You’ll also be responsible for the maintenance and holding costs of two properties when you buy a second home before your first house sells. These double housing costs can add up to several thousands of dollars in just a few short months while you are waiting to sell your current home.
Additionally, if you are struggling with the process of selling your existing home for the desired price, you may have difficulty affording your new home if you were planning to use some of the proceeds towards paying off your new home.
Financing Options to Purchase a New House
When it comes to purchasing a new house before the sale of your old home with a mortgage is complete, there are several financing options to consider.
Take Out a Second Mortgage
One option is to take out a second mortgage on your current home to use as a down payment for your new house. This allows you to buy a new home before selling your old one, but it does come with the added responsibility of managing two mortgages simultaneously and additional funds you’ll need to pay off your old house.
Obtain Another Mortgage
The most common option is to obtain a new loan to purchase the new house. One option is a government-backed loan, such as an FHA loan, which often requires a lower down payment. Additionally, there are specialized loans, like a VA loan for military veterans, that cater to specific groups.
Another option is to consider a bridge loan, which is a short-term loan that provides temporary financing until you can sell your old home. This can be a good option if you are confident that your old home will sell quickly.
If you have a 401k account, you may be able to borrow against it to fund the purchase of your new home. However, be sure to carefully consider the potential financial implications and risks before making this decision.
Loan from Friends or Family
Lastly, some home buyers choose to utilize personal savings or a family loan to finance their new home purchase. If you have friends or family members who are willing to help, you could consider borrowing money from them to fund the purchase of your new home. Just be sure to have a clear repayment plan in place to avoid arguments and unnecessary strain with those relationships.
Selling and Buying at the Same Time
Selling your home and buying another simultaneously requires careful planning and coordination. You’ll need to juggle the timing of multiple real estate transactions and timelines with home buyers and sellers.
to ensure a smooth transition between selling your current home and purchasing a new one. It may involve juggling the timing of multiple transactions and negotiating different timelines with buyers and sellers.
What are some strategies for coordinating the timing of selling and buying?
One strategy is to include a contingency clause in your offer, which states that the purchase of the new home is dependent on the sale of your current one. This can provide some peace of mind but may also put you at a disadvantage when competing with other buyers, especially in a seller’s market.
Another option is to negotiate a rent-back agreement with the buyer of your current home, allowing you to remain in the property for a specified period after closing. This option can provide you with some flexibility in your timeline to buy a home first and then move out of your old house when you’re ready.
How can you handle the logistics of moving while in the process of buying and selling?
Start by creating a detailed moving checklist and timeline to ensure everything is well-organized. Consider hiring professional movers who specialize in coordinating moves during real estate transactions.
Additionally, pack and label your belongings systematically to make the moving process smoother. Lastly, be prepared for unexpected delays and make backup plans to avoid any last-minute stress.
If you sell your home before buying your next house, you may need to put some of your belongings in storage or find temporary living arrangements until you close on your new home.
Covering Holding Costs and Mortgage of Old House
When trying to sell an old house, it is important to consider the holding costs associated with it. These costs include mortgage payments, property taxes, insurance, and maintenance fees.
To manage making two mortgage payments, it is crucial to carefully evaluate your finances and create a comprehensive plan. Start by budgeting and cutting unnecessary expenses to free up additional funds.
Some homeowners chose to rent out their property via short-term rentals in Baltimore, or other Maryland counties, through platforms such as Airbnb to cover housing expenses. By generating income from the property, you can offset the costs of holding onto your house until it is sold for the price you need.
What if my tenants don’t want to leave when it’s time to sell? Check out: How to sell your tenant-occupied property in Maryland.
Timelines of Common Ways to Sell a House in Maryland
The timeline for selling a house in Maryland can vary depending on the method chosen.
List Current House with a Realtor
One common way to sell a house in Maryland is to list your home with a real estate agent. This typically involves staging the home, taking professional photos, and marketing it to potential buyers.
The timeline for selling your home with a realtor may vary depending on the local market conditions and the attractiveness of your property. If selling through a real estate agent, it typically takes around 65-90 days from listing to closing.
Sell Your Current Home Yourself or Via Auction
Selling the home you currently live in home can be done in two ways: selling it yourself or via auction. Selling it yourself, known as “For Sale By Owner” (FSBO), gives you more control over the process and allows you to save on commission fees. However, selling property FSBO in Maryland also requires more time and effort on your part to advertise and negotiate with potential buyers.
On the other hand, choosing to sell your home via auction can result in a quicker sale, but you may receive a lower final price due to competitive bidding. Be prepared for numerous buyers to walk through your house and to move and vacate quickly once it sells. Auction sales often provide a quick sale, usually happening within 30 days.
Sell Directly to a House Flipper
If you need to sell your home quickly, you could explore selling to a house flipper directly. These investors specialize in purchasing properties in need of repairs or renovations, often offering a cash deal.
While this option may result in a lower selling price than listing the property on the open market to receive multiple home offers, it can provide a quick and hassle-free sale. For those selling directly to a cash buyer, the process can be much faster, with a closing time as short as 7-14 days.
Sell Your Home for Cash When You Need to Move Fast
As you can see, there are various options available to buy a house and move before selling your old home in Maryland.
If you find yourself in a pressing situation where you need to move quickly and sell your home before buying a new one, selling your home for cash might be the ideal solution.
At Creo Home Buyers, we buy houses in Maryland in any condition, allowing you to sell your home quickly and without having to worry about repairs or showings.
It’s important to evaluate your financial situation, consider the timelines for selling your current home, and explore the different financing and selling options to make the process as smooth and stress-free as possible.
What are the advantages of buying before selling a home?
Buying a house before selling allows you to have a new home ready to move into, avoiding the need for temporary housing. It also gives you more time to prepare your current home for sale, especially if the home needs repairs.
Is it possible to stay in my current home until I find a new one?
Yes, it is possible to stay in your current home until you buy a new one. This can provide you with more time to search for the perfect home without rushing the process.
What should I do if I find a new home before selling my current one?
If you find a new home before selling your current one, you can make an offer contingent on the sale of your current home. This allows you to secure the new home while still allowing time for your current home to sell, avoiding the need for two mortgages and other housing costs.
What is a home equity loan?
A home equity loan is a type of loan that allows homeowners to borrow against the value of their home. This can be used to finance a new home purchase before selling the current one.