Let’s be real, the concept of buying and selling, simultaneously can be a tad overwhelming. With buyer demand high and inventory low, it is a great time to maximize your investment and sell your home! That said, it is a bit of a double edged sword, because when you turn around to buy, you will be on the other side of that demand and inventory, which can be challenging with a contingency.

Here are 10 options to consider when looking to upsize, downsize or rightsize your home:

1. Bridge Loans.  Bridge loans are short term loans against the equity in your current primary.  There are a few options for these with smaller portfolio banks.  The bank will charge .5 to 2 points up front since they know this is a short term loan and limit you to 80% loan to value on the current home.  You will then be able to use that money to put a down payment on a new home and pay off the bridge loan when you sell your existing home. 
2. HELOC.  Even better than a bridge loan is a HELOC, or a home equity line of credit. This is also a portfolio bank loan on the equity on your existing primary home, but allows for a higher loan to value (90%) and the fees are almost non-existent.  Typically the only fee is an early termination fee of around $350.  However, I have seen this as high as $1200… so ask.   BIG difference… a HELOC is on a home NOT on the market.  Once it’s listed, the only option is a Bridge loan, so plan ahead.  Another bonus is, I work with lenders that can gather your documents and secure both the HELOC (or bridge) and your new home’s loan.
3. Add a Sales Contingency.  I am seeing more and more of these.  We are all familiar with contingent buyer offers; but what about marketing your home with a contingency for the seller finding a home, allowing the seller to get out of the contract if they don’t find one within a defined period of time.  Many of today’s buyers would be willing to wait just to have a house locked up.
4. Use 401k/IRAs.  One option to helping bridge the gap between the sale and the purchase is to utilize funds from your 401k or IRA. There are many rules around this, but in some cases it is possible. I have a large referral network of CPAs and Tax Advisors to shed more light on this, so if you are interested in learning more, please reach out!
5. Gifts/Co-signers. This one almost goes without saying.  One thing that many don’t know is that an employer, close friend, charitable organization or family member can give a gift .. can you say Uncle?  Did you also know that after 12 months co-signers can exclude this payment from their Debt to Income ratio allowing them to buy their own home?
6. Rent Your Current Home. Now this option does not help our inventory issue.. but does get you ready to move and capitalize on the rental income to help lower your debt to income.  With today’s historically low interest rates, cash flowing on investments is strong.  But note.. not all homes make good investments.  Are you ready to start building their Investment Empire?  Live.Laugh.Denver has a class for that 😉  AND.. if you end up selling that home after they move.. well.. life happens!
7. Longer Closing Periods.  Kind of speaks for itself.  Every buyer is coming in hot and wanting a quick close to be competitive.  But what if you had a longer close with a tight loan condition so you could look for that replacement home knowing the loan was locked up? It’s an option!
8. Rent Backs.  Buyers today are willing to give these away for free!  Per lending guidelines, a homeowner must move into their new home within 60 days.  So if the new buyer is buying your home as a primary or second home, the contract has to say the period is no more than 60 days.  But if buying as a rental or with cash, a longer period of time also works. Having said that.. remember.. life happens.  So if the rent back period was extended after closing, who am I to say?
9. Leverage a 3rd party “Home Swap”: Unlike iBuyers who eat into YOUR hard earned equity, a company does exist that can help you remove the contingency requirement when buying. This allows you to buy your new home, and then sell after you are all moved in. Not all homes and buyers qualify for this, but as a Knock certified agent, I can help you evaluate this option.
10. Move twice. We often avoid this at all costs, but if nothing else works, you will find that there are plenty of 30+ day furnished rentals in Colorado that can help you piece together the time between the close of your sale and the purchase of your new home. Again, we try to avoid this option, but some people take advantage of the opportunity to try out a new neighborhood or enjoy amenities they will not have with their replacement home. 

Bottomline, it is not IF we can get you in a new home, but rather how. If you are interested in buying and or selling, or a combo thereof, and want to chat through your options, please reach out, we would love to devise a customized plan that works best for you! 

The above list was compiled by Nicole Rueth of The Rueth Team at Fairway Mortgage. This blog first appeared at: https://www.livelaughdenver.com/posts/how-to-buy-and-sell-seamlessly