How to Buy a House Before Selling Yours?

Purchasing a home is undoubtedly a significant life milestone, especially if it is an upgrade. However, a common dilemma is whether a person should sell their current home or purchase a new one first. I entirely agree with Varsha Tiwary’s answer about how to buy another house before selling yours. However, I have prepared some reasons why I think buying house before selling old one is a good idea.

• For those who are not counting on the cash down payment coming from their present property might find it to be a decent idea to buying new house before selling old.

• Also, showing an empty apartment is much more practical for a buyer, and you can deal with him whenever you want because you don't have to worry about running out of time.

• If you have already purchased a new property, you can really keep a tenant even while you are trying to sell your old one. This will assist in covering a portion of your EMI for your new apartment.

• Selling a house, however, can take some time because the current market is favourable to purchasers.

The waiting period could be a little unpleasant if you are waiting to pay off a sizable portion of your loan by selling off your current property.

Make sure you don't rely on these processes to line up because doing so would produce an ideal environment, which is generally not achievable. Be prepared with a backup plan in case of emergencies.

To comment on what Varsha said regarding how to buy a house before selling your current house, I'd just like to suggest that you should do your own research, speak with your financial advisor, and keep an eye out for financing. This would enable you to buy a home more quickly before selling your current one.

Although there is no rule prohibiting you from servicing more than one home loan at a time, you are free to have as many home loans as you need in India. You can apply for 5 different house loans from 5 different lenders if you wish to buy, let's say, 5 properties all at once. But, if your property is in debt, it indicates that the lender has possession of the ownership documentation. You will need the lender's permission to sell this mortgaged home, which is doubtful unless you pay back the mortgage loan you have taken out.

LTCG Tax rate is 20%. This is in addition to the ordinary income tax that the seller must pay on the money received as a business profit. The LTCG is the difference between the purchase price and the sale price of the property, much like the SCTG.

Any profit from the sale of a property within three years after the purchase is considered a short-term capital gain. This is applied to the owner's overall income and is taxed at the corresponding slab rate. This reduces the sales earnings by 30% for people making more than Rs 10 lakh annually.

Also, the claimed tax savings are lost if a residence is sold within five years after the end of the fiscal year in which it was purchased. Principal repayment, stamp duty, and registration tax deductions claimed under Section 80C are reversed, and the amount becomes taxable in the year of sale.

Only the interest payment deduction under Section 24B is left unaffected.

For this reason, it is recommended to keep a property for at least three years. After indexation, the profit from a sale made after three years is classified as long-term capital gains and subject to a 20% tax.

I’d like to conclude my answer here about buying house before selling old one. I hope this helps:)

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Hey,

If you keep a track of the real estate market as I do, you must be aware that there are some highly competitive real estate markets. You could feel constrained by your options if you're trying to understand how to buy a house before selling yours and need the funds from the sale of your current home to put a down payment on a new one. In competitive markets, sellers profit from competitive bidding and low, quickly shifting inventory. These obstacles are difficult for purchasers, but especially for those who have a limited amount of time before the closing of their present house. It could be preferable to purchase your new home prior to selling the old one if you are convinced that it will sell extremely quickly. Here are six possibilities for purchasers who want to learn how to buy a house before selling their current house.

Can you buy a house before selling yours?

The majority of people buy a property in this manner because they often need the money from selling their current home in order to purchase a new one. Even if you have the money for the deposit, you will have a considerably tougher time getting approved for a new loan if you still owe money on your current house. Your intent to sell has no bearing on the situation for the lenders.

Steps for buying a house before selling your own

Determine your spending limit and down payment.

Review your finances and talk to your financial advisor about your circumstances if you want to buy another house before selling yours. Once your current house has sold, set the goal for the new home price that you are comfortable with for the estimated monthly payments.

Carry out personal research

Now that you know how much you want to spend on the new house, go on the internet to determine what you can get. In this stage, we advise clients to visit several open houses to get a perspective of what their money can buy.

Consult with real estate brokers

Meet with many realtors to find the best match. Request a market evaluation of your home's value and a marketing and selling strategy from each agent before allowing them to view it.

Research financing options and talk to lenders

It is essential to look around before selecting a loan when purchasing a home. Each institution will provide a variety of interest rates, costs, and products that differ significantly and usually by several percentage points. Make a list of creditors to contact and view available rate information by conducting some online research.

Try your maths

Start entering the rates offered by the lender you spoke with who had the cheapest deals or products for your situation into the personal information spreadsheet you created that contains all of your loan and income information. Are you at ease with the fact that you have a somewhat realistic predicted monthly total payment? Are you willing to pay the deposit, cover the closing fees, and carry both residences for a while based on your present cash reserves? How much money will be left over after paying off the existing loan, Agent charges, taxes, and other selling expenses depending on a conservative estimate of the sale price of your current home?

Assemble your team

Gathering your property investment team to help with the acquisition and selling of your property is the final step before seriously considering a purchase. To get a pre-qualification letter, decide on a real estate agent, a lawyer, and work with a lender.

I believe I was able to help you understand how to buy a house before selling yours.