OK, so you’re ready to sell and you are confident that you’ll attract an offer close to your listing price. That’s great. Now for the flip side question: where will you live after you close on your sale?
Seems pretty basic, but there are times when selling takes longer than expected and: a) a seller loses a target purchase house because selling is taking longer than expected, and/or b) after an extended period of time a seller gets a good offer but doesn’t have a new place to live locked in.
To avoid the negative consequences of such scenarios, a home seller should always have a back-up plan. Elements of that plan might be:
1. Rent for a time as you search for a new home to purchase after your home sale is complete. Finding a rental property can be much quicker than identifying a home for purchase, making an offer, negotiating, etc. Going rental also gives you the advantage of taking your time post-sale to find the right home for purchase and being a cash buyer the next time around. If you have stored some of your furniture and personal items while staging your home for sale you can leave them in storage while your rent and search for a new home to purchase.
2. Purchase a new home before your current home sells. Carrying two mortgages can be daunting, but if you can afford it you invest in certainty about where you will live next. If you move before your old home sells you can always consider renting your old home to generate income. Unless you own an additional property, you will be able to deduct mortgage interest and property taxes on both homes.
3. This may sound crazy, but can your parents or in-laws accommodate you for a few months post-sale while you look for a new home to purchase? Again, you’d have the advantage of being a cash buyer and could leave your stuff in storage.
4. Take your home off the market for a time, take a deep breath, keep looking for your next home and be ready to list your current home for sale again at a moment’s notice.
The point is, think this through ahead of time. Don’t let circumstances dictate to you.