Experts Agree This is the BEST Way to Buy a Home Without Selling First

If you need to sell your Los Angeles home before you purchase another home, there are so many things that you need to watch out for in order to not make this a total disaster. My name is Philippe Crook with eXp Realty. I've been a realtor for over 21 years, and I specialize in helping homeowners sell their property to upgrade or to downsize. In this video, I'm going to give you a lot of really great tips to make that transition as smooth and as stress-free as possible. If you get a chance, just please make sure you like and subscribe if you want to learn more about the Los Angeles real estate market and see great property tours. If you were like most homeowners, you're probably very nervous about putting your home on the market without finding another property or finding a property that will work, but you just don't love it. Well, I'm going to give you some really easy and actionable items that will help make that transition easier and give you a little bit more breathing room. One of the first things that I would do is talk to a lender about a specific of financing called the Buy Now, Sell Later program. This is a really great loan program that will allow homeowners to put an offer in on a property without having to sell their property. Now, the intention is that you're going to sell that property or at least list that property 90 days after you close on the new property. And the way that they can get around this is that they do not count the debt of your current mortgage towards the debt of your new purchase. Most people can qualify for two mortgages on one income, but if you eliminate one of those mortgages, then it frees up a lot more debt to income ratio that you can use towards a purchase. This makes this transition so much easier. This is my first and best option if you want to sell and buy a property. Now, there are some cons about this loan program. The biggest one is that you're going to have two mortgage payments. Now, keep in mind when you buy a home, let's say you close in the middle of October. Your first payment is not due until December. So that gives you a little bit of wiggle room because you're paying your mortgage in arrears. But if you have that time period in order to sell your property, then it makes it a seamless transition. One thing that you have to be really conscious of is how you price your property when you go to sell it. Make sure that you're using a real estate agent like me who will do detailed market analysis on your property to give you a really accurate idea of what your home will sell because you do not want to have your property on the market for six months while you're paying two mortgages. It's just not sustainable and that's the biggest risk. But if you think that your property will sell quickly or if your realtor thinks your property will sell quickly, then it's a great program that you can use. It's up to $3.5 million. They typically require 15% to 20% down and you can use the equity in your home towards your down payment by getting a equity line of credit or a second mortgage. All of that can be wrapped up and done prior to you looking at houses and submitting an offer non-contingent. The benefit about doing that is that you're writing a non-contingent offer on the new property. In our marketplace right now here in Los Angeles, most sellers are not willing to take their home off the market for a contingent sale unless your home is already in escrow. And even then, you might be competing against other offers that are not contingent at all. So this will give you a much better playing field and much more leverage than having a contingent offer on another property. Now, the second best option that I think if you need to sell your home before you purchase a home is to do what's called a leaseback. You put your house on the market, you get a contract from a buyer. In that contract, you negotiate what's called a leaseback, which means that once the property close, you're going to stay in that property and you're going to lease it back from the new owners at a negotiated rate. This is great because it gives you a little bit more breathing room. Now, you can do as long of a leaseback as possible, but just keep in mind that if your buyer is getting financing on your property, most lenders will not let you lease back for more than 60 days. More than 60 days, it's kind of considered an investment property and that changes all of the numbers for the buyer. So most lenders will require a leaseback to be under 60 days. The benefit about doing a leaseback is that you close on the property and you get all of that cash and you can write an offer that is non-contingent upon your home sale because it already sold. And the leaseback will give you some time and breathing room in order to find the property that really works for you and your family. Now, the third option is to list your home and get a contract on the property, but do a long escrow. This just delays the closing to give you a little bit more time to find the property that you want. This is also a little bit tricky depending on the buyer. Some of these buyers need to be in a property immediately and they do not have time to wait around for a 60 or 90 day close. From a real estate perspective, I always want to try to get the property closed as quickly as possible because things pop up at the last minute that could derail a transaction and that's the last thing that you want to do. You never know what is going to happen in 60 or 90 days. They could be hit by a car or lose their job and the whole transaction goes south. So you want to close that deal as fast as possible. Now, the biggest con about doing a long escrow is that you will still have to write a contingent offer on the new property. In our marketplace, we are still getting multiple offers in certain neighborhoods and certain price points and offers with contingency upon a sale are going to go at the very bottom of the pile. So it's not going to be very competitive when you go to put an offer on another house. The next best option is to list your home and once you get an offer on the property, you make a contingent upon you, the homeowner, finding another property. Now, this is probably my least favorite option because no one feels secure in the transaction. The buyer doesn't know if they actually are going to get this home because they're not sure if you're actually going to find another property. So I've seen a lot of buyers very hesitant about investing time, money, and their effort into a property that might not work out in the long run. So this is my least favorite of all the options. Now, the last option that you could do is list your home for sale, close on that property and move out and rent a property until you're able to find a new property. The biggest con about this is obviously you have to move twice and everyone knows that moving is a pain in the ass and doing it twice is even more hateful. So most people do not want to do that and they want to avoid it. But some homeowners don't want the pressure of finding a property in 30, 60, 90 days. So having this option and renting for a little while gives them that security that they're going to find the actual property that they want and it'll give them a little bit more breathing. So those are your five options if you're thinking about selling your home before you purchase another home. Now, when you go to sell your home, you want to make sure that the agent that you're working as has a comprehensive digital marketing strategy like me, and they're using professional videographers, professional drone footage. They know how to use and leverage social media. They run ads on Facebook and Google. These are all critical things to get as much exposure to your listings as possible. These are all things that I do and if you are interested in interviewing me to sell your home, I'd be more than happy to do that. I have a link down in the description that you can click on and schedule time to chat with me and we can go over your goals. And I would love to stop by your property and give you my assessment on what your home is worth and how long it's going to take and what I can do to get it sold. My name is Philippe Kruk with eXp Realty, investing in your dreams.