Buying in Cleveland Before Your Home Sells?

You’ve found the perfect home, but there’s one problem: you haven’t sold your current house. Should you sell first and risk losing the home you want? Or buy first and potentially carry two mortgages? It’s one of the most common questions I hear from homeowners in the Chagrin Valley and Cleveland’s East Side.

The good news? You have several options, including Howard Hanna’s Buy Before You Sell program, which allows qualified homeowners to use the equity in their current home to purchase their next one.

Should You Sell Your Home Before Buying Another?

There’s no one-size-fits-all answer. The right strategy depends on your finances, the equity in your current home and the housing market where you’re buying and selling.

Here are four options worth considering.

Option 1: Sell Your Home First

Selling first is generally the most financially conservative approach. You’ll know exactly how much money you have available for your next purchase, and you won’t have to worry about carrying two mortgages.

The downside? You could sell your house before finding your next one, potentially requiring temporary housing, storage or even two moves.

As an experienced Chagrin Valley Realtor, I frequently negotiate extended closing dates or post-closing occupancy agreements to give sellers additional time to find their next home.

Option 2: Buy Your Next Home First

If you have sufficient income and cash reserves, you may qualify to purchase another home before selling your current one.

The biggest advantage is convenience. You can move directly into your new home, then prepare your previous property for sale without the pressure of coordinating two closings.

However, either you’re paying cash or you must qualify for the new mortgage while still carrying your existing one. You’ll also need to cover the costs of maintaining two properties until your current home sells.

Another possibility is Howard Hanna’s Buy Before You Sell program, which can help qualified buyers access their existing home equity rather than waiting for their sale to close.

Option 3: Make a Home-Sale-Contingent Offer

A sale contingency means your purchase depends on successfully selling your existing home. This protects you financially, but it can make your offer less appealing to sellers, particularly when they’re considering competing offers without contingencies. In the current competitive Chagrin Valley market, sellers will rarely accept a home sale contingency.

Having your current home already listed, competitively priced and professionally marketed can strengthen your position.

Option 4: Howard Hanna’s Buy Before You Sell Program

This is an option I encourage homeowners with substantial equity to explore.

Howard Hanna Mortgage Services offers a Buy Before You Sell program that helps qualified homeowners use the equity in their existing home toward the down payment on their next home, before their current property sells. Through this program, eligible buyers may be able to:

• Make a more competitive offer in a tight housing market.

• Avoid the inconvenience of temporary housing or moving twice.

• Defer bridge-loan interest payments for an initial period, subject to program terms.

This can be especially attractive for longtime homeowners who have built significant equity over the years. But the program isn’t for everyone. Buyers must meet mortgage qualification requirements, and the amount available depends on their home’s appraised value, outstanding mortgage balance and applicable lending guidelines. Bridge loans also involve interest, fees and repayment obligations.

How Much Equity Do You Really Have?

Before deciding whether to buy or sell first, it’s important to understand your home’s equity and how much cash you’ll actually receive when it sells.

Your equity is the difference between your home’s market value and what you owe on it. Your net proceeds will be lower after accounting for selling expenses, mortgage payoffs and other closing costs.

For example, if your home is worth $700,000 and you owe $200,000 on your mortgage, you have approximately $500,000 in equity before selling expenses.

That doesn’t necessarily mean you can borrow $500,000 against your home. Bridge-loan programs have their own lending limits and qualification requirements.

My Howard Hanna mortgage loan officer can help determine whether the Buy Before You Sell program makes sense for your circumstances and how much equity may be available.

My Advice: Plan Both Transactions Together

After more than 17 years selling real estate in Cleveland and the Chagrin Valley, I’ve learned that buying and selling simultaneously doesn’t have to be stressful. But it does require a strategy.

Before listing your home, I recommend three important steps:

1. Determine your home’s realistic market value. A comparative market analysis will help establish an appropriate listing price and estimate your potential proceeds.

2. Explore your financing options. Speak with a mortgage professional about traditional financing, bridge loans and other potential options.

3. Develop a coordinated timeline. Consider listing dates, anticipated closing dates, possession arrangements and a backup plan if either transaction takes longer than expected.

Ready to Make Your Next Move?

Whether you’re downsizing, moving up or simply looking for a home that better suits your lifestyle, you don’t necessarily have to sell your current house before purchasing another.

As a top-producing Realtor in the Chagrin Valley, I can help you evaluate your home’s value, understand your options and coordinate a buying and selling strategy that works for you.

Contact me to discuss your next move!

About Mary Frances LaGanke

Mary Frances LaGanke is a REALTOR® with Howard Hanna Real Estate Services in Chagrin Falls, Ohio. With more than 17 years of real estate experience and an extensive marketing background, she specializes in helping homeowners buy and sell throughout the Chagrin Valley and Cleveland’s East Side. Her professional designations include Certified Negotiation Expert, Pricing Strategy Advisor and Accredited Staging Professional.

Howard Hanna Real Estate Services | 216-470-6799

Equal Housing Opportunity. Mortgage programs are subject to credit approval, eligibility requirements and applicable terms and conditions. Consult Howard Hanna Mortgage Services for current Buy Before You Sell program details. This article is for general informational purposes and does not constitute financial, tax or legal advice.