Yes, you can buy another house before selling your own home because there’s no rule against it. As long as you qualify for the mortgage of the new home, you can submit an offer and buy another house before selling your own. It’s completely legal to be the owner of multiple properties at the same time.
However, there are a number of other questions that might arise if you want to know whether or not you can buy another house before selling your own. Some of these questions might be:
- Can I put an offer on a house before selling mine?
- Is it hard to buy and sell a house at the same time?
- Can you buy a house and sell it within 6 months?
Stick around so you can find out the answers to each of those questions and more.
Can I put an offer on a house before selling mine?
Since you’re allowed to buy a new house while still owning your old home, you’re also allowed to put an offer on the house before selling your old one. However, according to HomeOwners Alliance, if you already have an offer set for the house you’re selling then your offer to buy a new home might be taken more seriously and maximizes your negotiating power in a deal. Of course, this completely depends on the market in which you’re buying your home in.
For example, if it’s a seller’s market at the time of submitting your offer to buy a home then the seller will have several other offers to choose between besides yours. But if your offer is the only one on the table, a seller might decide to take it even if you don’t have a sale offer up on your old home. It all depends on the situation.
Inversely, depending on the market in which you’re selling your home, your offer to buy a home might not even be accepted if the seller of the new home sees you already own a home that’s not for sale. It’s situational.
Is it hard to buy and sell a house at the same time?
Regardless of the housing market you’re in, it’s more complicated to buy and sell a house at the same time than to just do one or the other. The main reason why it’s difficult is that closing simultaneously on two properties can be tough to time up.
Timing is everything when it comes to buying and selling a house at the same time. If you’ve done both processes before then there’s a chance that you’re ahead of the curve and the process will be less intensive for you. However, if you’re a first time homebuyer－or seller－there’s a high chance that you will struggle with the process of doing both at the same time.
So what is the recommended course of action by the online real estate community for selling and buying a property?
Sell first and buy second
By selling your old home first and then buying a new home because it’s the least stressful due to the fact that you’re taking on the least amount of risk. After your sale is made, you’ll know exactly how much money is coming your way including deductions from fees and taxes. That way, you’ll know exactly how much money you have moving forward when you’re buying a new home.
But it can be tricky figuring out where to put all of your belongings when you check everything off the list of selling your home. After all, you need to be completely moved out of the house by closing time of the sale.
Some people get storage units for their belongings, rent a place on a monthly lease, stay with friends, or even stay in hotels. If you’ve established a relationship with the buyer then it might even be possible for you to pay rent to the new buyer of your old home for up to 60 days until you close on a new home.
Can you buy a house and sell it within 6 months?
You’re allowed to sell your home whenever you want. It doesn’t matter if it’s within 6 months of buying the home or not. The reason why 6 months floats around as the set amount of time that needs to have passed before selling is because it’s common to lose money when selling a home that quickly after purchasing it.
For starters, 6 months isn’t nearly long enough time to start building equity in a home. You’ll have paid off none of the mortgage and the house will have no time to have appreciated in value.
On top of that, you’ll have to pay taxes on the sale you made and if it’s within the same tax year as the last home you sold then you could be looking at massive tax payments coming your way that will eat out of your profits from your sale.
What you need to know about buying before selling
At the end of the day, it’s completely legal and fine to buy a home before selling an old one. There are no rules that say otherwise. But there are a few stipulations about the process and financial situation that every homeowner should be aware of.
First off, it should be obvious that it’s completely fine to put an offer on a new home before selling your old home. However, depending on whether or not your old home has been listed for sale, your new offer could be negatively affected. This depends on the housing market in which you’re buying and selling your homes.
If you do plan on buying and selling a house within a close timeframe, don’t think it’s going to be easy. Closing on two properties simultaneously will be difficult. It’s suggested that you sell first before you buy a new property, if possible. Finally, don’t worry about any 6-month rule. It’s completely fine to buy a home and sell it within 6 months. Just be aware you could be dinged financially between paying property taxes and closing costs.