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 Sell or Buy First

THIS IS THE "CHICKEN OR THE EGG" QUESTION DILEMMA! SHOULD I FIND THE NEW HOME FIRST THEN SELL MY CURRENT HOME OR VICE VERSA?

The answer is relatively simple: Unless you have considerable financial resources, it could be risky to put an offer on a new home before your current home has a firm offer on it. In fact, you could lose your opportunity to buy your new home if you cannot sell your current home in time. You might end up owning two homes, with two payments, at the same time.

When you make an offer to purchase a new home you can always make an offer contingent on selling your house. Would you want to accept an offer to sell your home on the contingency that the purchaser sells their house? No, you wouldn't. So don't waste your time asking for it. Sell your home first. Or, at least have a firm, non-contingent offer on it.

When purchasing your next home it's always advisable to come from a position of strength: You have a purchaser for your home, so you know the exact amount of equity you have to work with; you have your lenders "pre-approval" letter. You know exactly how much home you can buy, and the seller feels comfortable with your position.

Timing is everything: As you begin your search for your new home keep in mind that the sale of your current home could take considerable time. Regardless, if your home is "priced right" real estate markets can slow down quickly by rises in interest rates and National events. Allocate time for the unknown.

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Tampa Bay Metro Realty / 1st Capital Mortgage, 1513 East Park Circle, Tampa, FL 33610

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Get "happy": Take your financial paper work into your lender and tell him/her what you want to accomplish (buy another home, an investment property).

Get your lender to give you a "pre-approval letter" for a loan (see Finance Center for why you want pre-approval and not pre-qualification). This will help you be first in line at the bargaining table for that property you want to purchase.

Caution: DON'T BUY THAT NEW CAR OR FURNITURE: When you're applying for a new property loan or refinancing a loan do not add any additional debt to your credit report. In most cases this will lower the overall amount to credit (dollars) a lender will lend you. To understand this clearly, go to my Financial Calculators section and look at the "Mortgage Qualification" calculator. There you will see what happens to the amount you can borrow before and after adding extra debt! So, if you're planning on financing a new car, furniture for your home or a vacation, hold off until after your loan "closes".

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why you want pre-approval and not pre-qualification). This will help you be first in line at the bargaining table for that property you want to purchase.