Mortgage Minute: Buying a New Home While Selling Your Current

Welcome to our Mortgage Minute series, where our partners over at Midwest Lending break down the particulars of home financing, and bring a personal touch to the lending industry, as only they can.

Do you remember what it was like to buy your first home? If it has been several years, you might be pleasantly surprised just how much easier it is today! The days of signing piles of paper while waiting weeks for a decision are over thanks to today’s online mortgage technology.

That’s not likely the only thing that will be different this time around, however. For this purchase, you’re also juggling the sale of your current property, while you shop for your next home. So how exactly does that work?

You may end up feeling like a juggler, with too many balls in the air. And while it will be a little more tricky than last time, rest assured that your Midwest Lending mortgage professional will do the heavy lifting for you.

Timing Matters

Ideally, you’d want to use the equity from your first home as a downpayment for your new home, right? Passing those funds from one place to another would make this whole process a cinch.

Unfortunately, rarely will a transaction happen so seamlessly, and that’s partly due to market conditions. If you are in the market to buy your forever home, research your local real estate market first. Look at both the area where you are selling, and the areas you are considering your next purchase.

When considering the selling side, talk to your real estate agent about how long comparable properties have been sitting on the market. This information is useful for determining how to price your home competitively, while still making a reasonable profit. It is an easy trap to fall into, listing your home too high, only to drop it several times before you get an offer.

Considering the purchase of your new home, you’ll also want to research the market. Decide which areas you might want to purchase in — that way, when your current home is under contract, you’ll know precisely where to make your own bid. Of course, you’ll also want to have talked to your Midwest Lending mortgage professional ahead of time, so that you can be sure you are properly pre-approved for this new offer.

Regarding Contingency Offers

A sale and settlement contingency offer is when you use the proceeds from your current home to fund the purchase of your new home. Of course, this means that your offer is dependent on the sale of selling your existing home.

While ideal for you as the buyer, it’s not a very attractive deal for the seller of the home you hope to purchase. If another offer comes in from a buyer with a proper pre-approval letter and no contingency, they will often win the bidding war.

Sellers can even entertain other offers after they’ve accepted a contingent offer. In order to facilitate a “non-contingent” offer, you may want to consider a bridge loan. 

Bridge Loans

A bridge loan is a short-term loan used until a person secures permanent financing, or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow. Essentially, you agree to “rent” your current home. That way you can sell your home and still live in it for 2-3 months while you shop for your next home. While the option is not always available, it’s definitely worth looking into.

There are many moving pieces when it comes to buying a home. Luckily, you have a team available to take care of all the details. Your dedicated Midwest Lending loan mortgage pro will work with you and your realtor to make your next purchase quick and hassle-free. Contact us today to learn more!


Busy Parents’ Guide to Selling a Home

Photo by Daria Shevtsova from Pexels

We’d like to introduce you our latest guest blogger, Kris Louis of Parentingwithkris.com! Kris combines her first-hand experience as a home seller with her everyday experience as a mother, in order to bring a fresh perspective to the real estate process.

Selling a home can be stressful for anyone. Selling your home when you have kids can often seem downright impossible. However, with a little planning, you can keep your home clean and have it ready for showings, even with very little notice.

Store Half Your Stuff

According to real estate experts, decluttering your home is a must. When a buyer walks through your home, they want to imagine their own belongings there, and they can’t do that if they can’t see through all the clutter. So, box up at least half of your stuff and put it in storage, removing all the outdated decor, family photos, kids’ artwork, knick-knacks, sports gear, and bulky furniture. Ideally, you want your house to look like a minimalist model home.

Also, keep your kids’ favorite toys in the house, but store all the rest. Assure your children that you’re not throwing their toys away — you are just putting them aside until you get into your new house. For the toys remaining, have a simple storage solution (like an ottoman or bench with storage inside), so you can get toys out of sight in a flash before a showing.

Deep Clean from Top to Bottom

Get crayon marks off the walls, sticky stuff off the baseboards, and handprints off the doorknobs and windows. Scrub the kitchen and bathrooms until they sparkle. If you don’t want to deep clean yourself, hire someone. According to Kiplinger.com, most buyers do not want wall-to-wall carpeting. If you have the money, replace your carpets with vinyl planks, wood flooring, or tile. Used carpets never look quite new, even if you steam clean them. Another bonus of replacing carpet is that other types of flooring are easier to clean in a jiffy.

Stage Your Home and Take Photos

To stage your home, make sure there are no toys, baby gear, or pet items in the living room, kitchen, bathrooms, or other common areas of the home. You want as little personal items in the home as possible. In your kids’ rooms, paint over any kiddie-themed murals and remove bean bags, dollhouses, play tables, and so on. Decorate with simple, gender-neutral decor. Once your house is clean and everything is staged, you should have professional photos or video taken to create a virtual tour of your home. Your real estate agent can recommend someone experienced to use the right angles and lighting to make your home look larger.

Prepare for Showings

Ideally, you’ll be able to give your realtor set hours to do showings every week. If he shows the home during these blocks of time, you’ll know the schedule and be able to clean ahead of time. In between showings, you’ll still have to live in your home without getting it messy, which seems impossible with kids. So, get in the habit of cleaning bathrooms and doing laundry every night. If possible, grill and eat outside as much as possible, using paper plates. Your kids will think you’re having a fun picnic, and your kitchen will remain tidy.

Although scheduled showings are ideal, undoubtedly there will be times when last-minute showings are necessary. Practice a 15-minute clean routine so you can get your home clean quickly when you get a call about an unexpected showing. In 15 minutes, you can:

  • Remove toiletries from the bathroom, put down the toilet seat, and wipe off the counter.
  • Empty every garbage can and diaper pail, and spray air freshener nearby each.
  • Put dishes in the dishwasher, quickly sweep the kitchen floor, and wipe off the counter.
  • Make the beds, fluff the pillows, and close the closets. Turn on all the lights in the house, and open blinds and curtains to let in the light.
  • Pick up any remaining clutter and check for any off-putting smells.
  • Grab a few toys and some snacks and head to the park or another outing with the kids.

Staging your home right and keeping it as tidy as possible will make it more attractive to potential buyers. With a little effort and a good routine, you will always be prepared for showings, and you’ll have offers rolling in before you know it.