Market conditions are constantly changing, which means the challenges buyers and sellers run into change as well.

Right now, there are a lot of sellers who would love to sell their house and know it will sell quickly. However, they aren’t sure if they’ll be able to find a house that they want. This creates a problem because the sellers are worried that they will end up without a home once theirs sells.

After all, there isn’t a lot of inventory out there and buyers often run into multiple offer situations. 

What most agents do is set up a search for the buyer and, when the perfect house pops up, they make an offer on that house. 

The problem is that the offer is contingent on the buyer’s current house selling but the buyer’s current house is not on the market yet. 

While they are getting their house ready to sell, the perfect house they want to buy gets five more offers that aren’t contingent on the sale of another property, and our move-up buyer loses out on that perfect house. 

There are a few different strategies you can use to get the house of your dreams and sell your current one: 

1.) This plan doesn’t work for everyone, but you can put your house on the market, sell it, and move in with a family member or friend until you find the perfect home to buy.

2.) Put your home on the market, get it under contract, and purchase a new home. Since your home is already under contract, the seller will be more likely to accept a contingent offer. You can even line the transactions up so that you close both transactions on the same day, which is really the perfect scenario. 

“Recasting the loan allows you to close on both transactions and get the results you want.”

3.) Recast the loan. Not many agents use this strategy, but our team has found it to be very successful. 

Most people need to sell in order to buy because they want to move the large amount of equity from their current home to their new home. They also want to avoid a huge mortgage payment. 

If you qualify to buy a new house without selling the current one, you can get a conventional loan product and make a 5% down payment. You will get mortgage insurance but you will be able to close on that house. Right after that, sell your current home. 

Let’s say you have $100,000 worth of equity in the home that you sold. You don’t have to refinance the mortgage on your new home. If you have the right kind of loan, you will be able to take that $100,000 and put it into the existing mortgage on your new home. You can then recast the loan as if that $100,000 has already been there, which will lower that mortgage payment.

Recasting the loan allows you to put the cart before the horse, close on both transactions, and get the results that you want. 

If you have any questions or you need help buying and selling a home, just give us a call or send us an email. My team and I would be happy to help you!