What do you do when you're ready to build your custom dream home but have a house to sell? There are many options to choose from and it is important to find the one that works best for you. We have broken it down so you can plan ahead and make the transition as smooth as possible.
Move then Sell
If you can afford it financially, the least stressful way to build is to move into your new home and then sell your existing home. But, the financial expense of this needs to be understood and budgeted for.
Many new home buyers are uneasy about starting to build a new home without first having their existing home sold. The thought of having two house payments can be scary. Selling your existing home first eliminates the financial risk of the existing home not selling by the time your new home is complete. We have found that as long as the existing home is priced correctly, it usually sells during the construction period. The biggest problem we see is that some sellers have unrealistic expectations about what their home is worth. A good realtor can provide a market analysis to give you an accurate picture of what your home should sell for and the time it should take them to sell it.
Negotiate Closing Date
Most new home buyers contract to build the new home and then put their existing home up for sale while the new home is being built. Ideally, your realtor is able to negotiate the closing date so you can move directly from your existing home into your newly built dream home, but that is not always possible.
Rent Your Sold Home
The next best solution is for the buyer of your existing home to let you stay in the home after closing and allow you to rent it until your new home is complete. But, there is no guaranty that either of these scenarios will happen.
The way to eliminate the potential financial stress of two house payments or the house selling too soon is to sell first then build. But, this financial security comes at a cost. You need to find temporary housing while the new home is being built. An extended stay hotel and POD storage can be a great solution for a couple of months. Some rent an apartment or a house, others move in with family or friends. Regardless of what type of rental housing you choose, this can be a big lifestyle adjustment. How will the temporary housing affect your children, pets, and marriage? Over the years we have seen most temporary housing work out great but there have definitely been some horror stories. If you can live with family free of charge the money saved on rent and utilities can be used as additional down payment or for upgrades. That can be a big savings.
Purchase a Model Home
Another alternative to building is to purchase a builder's model or spec home. In this scenario, you would sell you home first and then buy the builder's home. You sacrifice the ability to custom design and make changes but you eliminate the stress of timing the house sale and temporary housing. You still get a brand new home, but save the construction time process.
Build a Model Home
A final option is to work with a builder to build your dream home as a model home. Our company does this a lot. We build the house and sell it to the homeowner. We then lease it from them for one to two years. The homeowner gains rental income and time to leisurely sell their existing home.
Go with the option that makes the most sense for you and your family. Tell us about your dream home today!