If you have the financial means, you can buy as many houses as you want. Most people, however, typically sell one house before buying another. If there's an overlap between when you sell one home and buy a new one, it can put you in a financial pickle. Here's what to do.
Make a Contingent Offer
Make an offer on a new house contingent on you selling your current home. This approach essentially says, "Yes, we want to buy this house, but only if we can sell our house first." This type of maneuver doesn't usually work in a seller’s market, when houses are being sold quickly and with no conditions, but it can be highly effective in a buyer’s market, when homes are sitting on the market for some time.
Rent Your House
If you can't sell your house before you buy a new one, yet you still qualify for whatever type of financing you need to meet your new mortgage obligations, you can rent out your old house or offer a lease-to-own option. Using this approach, a renter pays normal monthly rent, with a portion of the proceeds going toward an eventual down payment, should he choose to buy the house within a predetermined time period.
List Your House
Put your house on the market and price it competitively. If you need to sell it quickly to qualify for a new home loan, you're going to have to offer better terms and conditions than other comparable houses in your area. Let potential buyers know you're willing to wheel and deal, or have a licensed real estate professional do it for you.
Sock Away Some Money
If you’re intent on buying a new house while you still own another home, be financially prepared to continue paying the mortgage on your old home while simultaneously paying mortgage on your new home as well. Find out how long houses in your neighborhood typically stay on the market and plan to have enough money in the bank to cover dual expenses indefinitely. If you don’t have a financial plan, you could end up burning through your savings or even losing both houses if your financial situation tanks.
Vacation and Second Homes
If you’re financially positioned to buy a vacation home, remember to take into consideration the cost of upkeep on the home you’re not currently occupying. For example, if you have a winter home in the desert, you would probably be wise to hire a caretaker to maintain the property, handle lawn care, mail delivery and essentially make sure the house stays intact while it’s vacant.
References
Writer Bio
Lisa McQuerrey has been a business writer since 1987. In 1994, she launched a full-service marketing and communications firm. McQuerrey's work has garnered awards from the U.S. Small Business Administration, the International Association of Business Communicators and the Associated Press. She is also the author of several nonfiction trade publications, and, in 2012, had her first young-adult novel published by Glass Page Books.