The majority of people in the Atlanta area cannot afford to own more than one house at a time. If you need the money out of your current home to purchase a new one, you may be concerned about how you can time the sale and purchase so that you don't end up homeless or footing two mortgage payments. In previous markets, your Atlanta agent could use what is called a "contingency on sale" in which the purchase of your new home is directly contingent on the sale of your current one. It is really the safest option because it contractually prevents you from having to purchase another home while you still own your first. But, in today's hypercompetitive market, that probably isn't going to fly. If you are looking to put an offer on a popular home, the fewest contingencies wins, every time. Most sellers will not consider a contingency on sale.
So, now what? You want to move but you also want to protect yourself. Here are a couple of ways you can time the transition perfectly.
1. Sell First. The most obvious one but probably the one that makes people the most nervous. Understandably so, you don't want to be homeless, especially if you have small children and pets to care for. The good news is that it's still a seller's market, so you can add to your list of requests something that is called "temporary occupancy" which allows you to stay in your home after the closing date for up to 60 days. The extra time gives you the ability to extend your search for a little longer so that you don't have to perfectly time both transactions. Still can't find anything? Talk to your agent about a backup plan. Short-term home rentals may be available to fill any gap.
2. Get Your Home Ready To Sell Before Searching. If you aren't comfortable with putting your home on the market before you buy, you need to do everything in your power to get your home ready to sell before you start your search. Have your Atlanta agent walk your home with you and suggest repairs or modifications to get your home market-ready. Get professional photography scheduled and have all of the paperwork signed. That way, if you do get under contract with your dream home, you can immediately put your current home on the market and aren't wasting time (or presentation) by having to scramble at the last minute to prepare.
3. Get Creative With Financing. If your lender will approve you to carry two mortgages at once but without the sale of your house, you're missing a downpayment, there are ways to temporarily fill the gap. One of the most common options buyers can utilize here in Atlanta is a 401k loan. With this type of loan, you are able to borrow against your retirement savings to fulfill the obligation of a down payment. Note that the maximum amount you can borrow, rates, and specific terms are going to vary significantly depending on your employer and management group. You'll want to do your research on this before you consider it as a legitimate option. However, it can be a great short-term bridge. Just make sure you put the money back as soon as your house sells. If not, you will take a big hit from an appreciation perspective as the money can't grow if it's not in your retirement account.
Buying and selling a home in Atlanta can be done, it just may take a little more planning and strategy than usual. Have you timed buying and selling your home in today's real estate market? How did it go?
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