There have been many changes in the mortgage industry and standards are much higher than they were a year ago. Do this First, if you still owe on your current home you'll need to talk with a lender to see if you will qualify for a new loan while holding your current mortgage. If you do qualify and you don't mind paying for 2 mortgages at the same time... than go for it.
If you do not qualify for the 2 mortgages, than you will first have to put your current home on the market. I wouldn't be to worried about doing a contingency. It's very common and while there a risks associated with a contingency, there are risks with every Real Estate transaction.
Also, consider having your Realtor talk with local builders to see if they will work with contingency offers or some builders even have a purchase program for their new home buyers.
Here is a link with a couple of different views on this subject. Hope this helps and good luck.
Congratulations on attempting to get advice before you take action! With the quickly changing real estate market, it's the best action you could take.
As a lender and someone who's been in the real estate industry for over 30 years, my strong suggestion would be simply this ... talk to a qualified professional lender before you make any decision regarding the purchase of another home or the sale of your present home. For many reasons, proceeding with another purchase prior to selling your existing home could leave you in a precarious position financially. It would be best to determine what options you truly have financially and financing-wise before you go any further. A lender will be able to give you that information and present the options you have for moving forward.
Being a conservative lender in nature, I am always very cautious when facing this particular situation. Even in a good real estate and employment market, being saddled with two house payments could be financially damaging when faced for even a short time. With current mortgage lending being what it is, banks/lenders are not so likely to even consider this financial scenario for you as they once were. Qualification for another home payment may be indeed nearly impossible. Without having further financial information, it is impossible to make that final determination though ... so speaking and working with a lender is almost mandatory at this time and would provide the best financial protection for you moving ahead.
As I stated above, I am a professional banker/lender with over 30 years of experience and expertise. Through my company, Chicago Bancorp, I am fully capable of lending within Oklahoma. To learn more about myself and my company, please view my website at http://www.genemundt.com. It would be my pleasure to answer any questions you may have regarding financing and selling your home(s) and to also assist you in your financing needs as you move forward.
I can be reached through Trulia, my website, by email: email@example.com, or my phone at 815.277.4036. Please feel free to contact me at your convenience. I look forward to assisting you soon, earning your trust, and your mortgage business.
Gene Mundt, Professional Mortgage Banker http://www.genemundt.com
Here are my views on all of it...
1.) If you have to put a contingency on selling your home first, especially if it's not even on the market, you lose negotiating power because the sellers are taking a risk that you will be able to sell your home.
2.) If you do a bridge loan expecting that your home will sell with no problems, and it takes longer than you expect you can wind up in a huge pickle (I've seen this happen).
3.) If you buy a new one with your old one expecting to get lets say $100,000 because that's what the market analysis told you before you bought the new one, but yet something happens and now you can't find a buyer willing to pay more than $85,000... not fun.
But here's the biggest concern I run into... "But Jace, I don't want to be homeless." That's the great thing about being the seller, if they give you everything you ask for in their offer, but they want to close in 2 weeks and you don't think you can find your new home for 2 months then counter back at closing in 2 months. You are in control of the situation, you don't have to worry about not having a place to stay.
I have a buy/sell analysis that we could go over and make sure what would be best for you, but in general I feel it's best to have your home on the market first for all of the above reasons.
You could then take your time moving out, cleaning up and rehabbing anything on your "old" house that needed fixing, presumably buying in a lower priced market with great rates and selling in (hopefully) a somewhat better market, while still only making payments on the one property, if you can pay cash for the second. Having said that, please remember it is a risky proposition, but may work out for some.
This depends on your qualifications as seen by the bank. You first need to talk to a reputable lending company to see if you qualify to handle two mortgages. Unless you owe no money on your current home then that won't be an issue. If that's the case then as long as you're up to maintaining utilities & the yard while it's on the market and caring for your new home at the same time, jump right in!
Let me know if I can be of any further assistance.
What is the average market time for homes like yours? Add 3 months to that just in case and ask yourself if you can afford to pay the mortgage on both homes for all that time.
What is the average rental market time in case your home doesn't sell?
If you are able to sell your first home, you will be in a better buying position. It may enable you to have a larger down payment which can help keep your interest rate lower on your next purchase. Sell if you can - back to back transactions are possible.