This is an all too common occurrence in real estate and I’d like to discuss your main options on buying that dream home and what you can expect from each of them. There is no right or wrong way to go about obtaining your dream home, but knowing the options before you begin, could help you achieve your goal more smoothly.

• Make an offer contingent on the sale of your current home.

From the Sellers point of view, an offer contingent upon the sale of your current home, makes for a weakened offer. Even if you set a deadline date in your Offer to Purchase in which your home should be sold and closed, you are asking the Sellers to take their home off the market in the hopes that you will find a buyer for your home. In so doing, the Seller may miss out on other good buyer prospects. If the Sellers need to be out of their current home by a specific date, there is probably no way they could consider your offer.

Before deciding to make an Offer to Purchase contingent on the sale and closing of your current home you should take into consideration the state of the local real estate market. If the market is slow, the Seller may be more agreeable to a contingency offer. However, if homes are selling, you will probably be less likely to negotiate an accepted offer with the Seller.

Today many Sellers respond to a Buyer’s ‘sale of current home contingency’ with the following clause in the form of an addendum: “Sellers will continue to market their home and if another offer is presented that the Sellers find acceptable they will advise you in writing and you will have 72 hours from receipt of written notification to remove the contingency or your accepted offer will be null and void”. This is somewhat like real estate roulette, but it is a way for you and the Seller to move forward on this desired transaction. If you choose to accept the Seller's terms and you really want the home, I suggest that you talk immediately to one or more loan officers about ‘bridge’ financing just in case the Sellers invoke the ‘remove the contingency’ clause in your Purchase Agreement.

• ‘Bridge’ financing allows you freedom to act now to secure that home.

There are several variables on how a bridge loan is set up, be sure to go over all of these with your financial institution. A possible worst-case scenario: if you have an existing mortgage on your current home, you may need to be able to afford to carry three loan payments: the old mortgage, the new mortgage, and the bridge loan until the closing on your old home.

Of course there are several variables to the above situation:

1. You may already own your current home free-and-clear.
2. Your financial institution may make your bridge loan with only one payment, due at the end of six months. Assuming your current home sells and closes within this six-month period of time, this is the ideal loan to seek. Plan on using this same institution for your new mortgage and applying for both ‘bridge’ and your new mortgage at the time you apply for bridge financing.
3. Check out the various types of ‘bridge’ financing options with more than one financial institution before making any formal application.

Let me know if you have any questions about this article or any other real estate question. I can help you get into your dream home.