Pasadena Real Estate Blog

Strategies for Buying and Selling a House at the Same Time

Simultaneously buying a home while selling another can be tough. In a hot market it’s often a deal killer to include in your offer to buy a new home, a contingency to sell your existing home. Sellers will simply take their pick of offers not burdened by such a contingency.

On the other hand, if you sell your existing home first without signing for a new one then you could wind up temporarily homeless or spending exorbitant amounts on hotel rooms or other high-priced temporary quarters.

You do have some alternatives. The best-case buy-and-sell scenario is for those who can afford to own two homes — if only temporarily.

For those who can’t afford to own two homes, a more common move-up strategy is what’s called a “rent-back.”

In a rent-back, the seller sells the home but stays put, paying rent to the new buyer. The rent is typically the same as the new buyer’s mortgage payment, including principle, interest, taxes and insurance.

A back-up and riskier strategy is what’s called a “bridge” or “swing” loan. Using your existing home as collateral, you take out a bridge loan for three months to five years to use as the down payment on your new home. Once you’ve purchased your new home, you sell the old one and pay off the mortgage.

Carol Lollich, GRI, CRS
Broker-Owner

E-mail: mailto:homes@lollich.com
Website: www.pasadena-homes.com

(888) 412-0172 (Toll Free)

Concierge for Homes
2700 E. Foothill Blvd., Suite 122
Pasadena, CA 91107

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The above article is from my June 2006 newsletter, provided by Realty Times, Inc.