Is it a Good Idea to Buy Before You Sell in Raleigh, NC?
The Pros and Cons of Buying a New Home Before Closing
Don't Miss Out on Your Raleigh, North Carolina, Dream Home!
How to Successfully Buy Before You Sell in The Triangle
Raleigh, NC, has become a highly sought-after place to live in recent years and an even more popular place to buy before you sell. With the increase of people looking to move to the Triangle area, it's only natural to consider purchasing a new home before you have closed on your existing one. This is an enticing opportunity for many buyers since you can transition from your old house into your dream home without major obstacles. Still, there are significant pros and cons for those looking to buy a new home in Raleigh before closing on the old one. Consider them all carefully before you decide whether this is the right option for your family.
In this blog post, we will first take a closer look at the advantages and disadvantages. Then, later, we will consider what makes it the right time to buy and provide you with insider tips so that you can decide if it's worth making such a big move now rather than later.
Securing Your Dream Home
Houses on the Raleigh-Durham, NC market are hot commodities. The Triangle market often moves quickly; if you're not prepared to purchase, it won't wait. Unfortunately, waiting can often result in you missing out on your dream home or the deal of a lifetime, which is why many buyers in the area find it beneficial to buy first.
Avoid Transitional Living Expenses and Settling
When you purchase a home first, you ensure you have somewhere to live once your house sells. You save money on transitional living expenses, like hotels or rent spaces, and avoid pressure to make a quick decision. Additionally, you won't have to settle on the home you pick because you gave yourself time to choose wisely.
Sell Your Home More Quickly
By purchasing a home before selling, you won't have to worry about accommodating showings and maintaining the lifestyle you wish to sell. In addition, unoccupied houses go off-market more quickly because the house is viewing ready at all times, and the Realtor is free to come and go as needed.
Two Mortgage Payments
Owning two houses means you owe two house payments. This could be an extreme burden without proper preparation, especially for young families. Homes in The Triangle move fast, but still, the average time it takes to sell is 64 days, so the likelihood of having two payments for some time is high. Before moving forward with your plan, it is best to carefully look at your finances.
Securing a Down payment
It takes a substantial amount of money to secure a home. A loan will cover most of it, but you will still need to make a down payment of 3%-20%. Finding money for the upfront costs of buying a home is difficult, especially when you have two mortgages. In addition, many people depend on the profits from selling their old house to support their new purchase. Without that money, lenders may see you as a risk.
Inflated Mortgage Rate & Terms
You may struggle to find suitable mortgage parameters if mortgage companies view you as a risk. This is because your debt to income level is a significant part of your credit score and identifies your gross debt compared to how much you earn. When you add two mortgages, that ratio can become wildly imbalanced and significantly lower your score. Unfortunately, lower credit scores suffer higher interest rates and, therefore, higher payments.
What Makes the Right Time to Buy A House in The Triangle?
The Timing of Buying a Home Before Selling Your Old One
Purchasing a home is one of the most important decisions of your life, so it's understandable that people want to make sure they're getting into something that makes fiscal and personal sense. Unfortunately, with steadily increasing housing costs in this region, it can be daunting for potential buyers to determine the optimal time to purchase. Nevertheless, there are many compelling reasons why investing in real estate now may pay off down the road - from rising prices on homes across The Triangle to securing one in this highly competitive market.
Homes tend to move fast in Raleigh, North Carolina, so it is best to move quickly. Prepared buyers will have the easiest time taking advantage of buying a home before selling the other. This is because they can demonstrate their available resources without making a sale. As a result, they find themselves in the ideal position and have more room for negotiation at closing.
Still, all buyers in The Triangle should consider buying before selling because of the market. While it is cooling off, Raleigh is a highly sought after market. As inflation rises, it increases rent, mortgage rates, and the cost of new homes throughout the region. Therefore securing a house now instead of later will get you a better deal.
It is also important to consider the optimal times of year for buying and selling. For example, the market is saturated during spring and summer. As a result, you might have difficulty selling or beating out the competition in a bid. Still, it is always best to consult a real estate agent before making final decisions. An expert, like the ones at A Cole Realty, can provide insight on buyer/seller trends, provide financial advice, and develop a strategy that helps you buy before you sell.
Tips for Financing A New Home Without Closing on the Old One
Methods of Buying a Home Before Selling Yours in Raleigh, NC
Buying a home is never easy, so doing it before you've sold your other house only complicates the process. Fortunately, several solutions allow you to secure a home even if you are not financially prepared.
Here are some tips to help you buy before you sell in Raleigh, NC.
Start by researching lenders to see if you qualify for a second mortgage and what rates you can find. Don't settle; ask a Real Estate Agent what terms are reasonable.
Make a contingency offer on the house you want to buy. Contingency offers depend on your current home selling and only become a commitment if and when your home sells. If you cannot find a buyer, the contingency clause in your offer gives you the freedom to walk away.
Contingency offers are a great way to purchase a home; however, the trick is finding a seller willing to accept it. Most sellers are looking for a sure thing regarding their home. Therefore, contingency offers will put you at a disadvantage when looking at a competitive property with multiple cash bids.
Bridge loans are short-term contracts that aid in down payments. However, they typically include high-interest rates and short-term contracts, so you may have trouble repaying the loan if you do not sell your home in time.
You may also take out a line of credit on your home or an equity loan. It is a loan based on the value of your home. Equity loans are an excellent option for people who have already invested in their homes. Still, they are not without their risks. If your home doesn't sell, you will be responsible for two mortgage payments and have to make loan payments.
Power buyer services are great for individuals looking for low-risk financing options. Power buyers will give you a percentage of your home equity up front to put toward a new home without interest. They make money by taking a piece of the home's equity, but they will go on to help ensure your home sells and then give you the difference if it is sold above asking.
Dipping into savings accounts and 401ks will not be an option for every buyer, but this is the best route if you are able. With this method, you do not have to worry about extra debt, payments, or making less than your house is worth. You secure the home you want and replenish the funds once your other house sells.
Buy Before You Sell in Raleigh, NC, With A Cole Realty
Cash In on the Difference an Experienced Agent Can Make
As you can see, there are many ways to buy before you sell in Raleigh, NC. An excellent real estate agent can help you navigate the complexities of buying a home before selling your old one. The most important thing to remember is that it is a significant investment. Therefore, having an expert to advise and guide you is incredibly helpful.
A Cole Realty has experience with the home market in The Triangle and a team of agents committed to providing you with guidance and insight. From offering advice to negotiating contracts, they will be your voice throughout the process. A real estate agent can ensure everything goes smoothly and provide a personalized buying experience, so you do not have to keep track of all the details. They understand the complexities of this process and will ensure everything is handled efficiently.