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Closing on new home before selling current one

Interested to see what others would do.

We are purchasing a new semi-custom home for $1.75M, closing on August 22nd. Very excited but a little anxious given how weird the market and rates have been this year: We went into contract back in March (no contingency to sell our current home since we felt we had plenty of time, and lender qualified us on both mortgages).

We have our current townhome listed at $1.175M (been on the market for 45 days). We’ve had 4 open houses and 10 individual showings. A few people have loved the home, but have mentioned it’s a little out of their budget with current rates. We aren’t desperate to sell the home, as we purchased for $975K in 2021 at a 3.25% rate. The same floor plan sold for $1.3M twice in 2022, and $1.15M in February of this year with less features and finishes/worse appliances. We are in a market (Denver) where plenty of homes are just sitting. A couple other smaller homes in our neighborhood have decreased price, and still no offers.

We are thinking that we go ahead and move out at the end of the month and keep our place listed until end of September to see if the fed rate cut will stimulate more interest. If we don’t get this home under contract, money is definitely going to be a bit tight because we had no intention of floating >$2M of mortgages. If we receive no offers, we may opt to just rent out our home and find a 6-12 month lease. We can’t legally do a short term rental without considering it our primary residence… there appear to be some loopholes, but this would also mean having to furnish the place and it’s 2200 sqft…

We’ve had a traumatic experience renting out a previous condo (tenant’s boyfriend moved in and smoked weed, tenant denied her boyfriend was living there and assured us there was no smoking happening despite the neighbors smelling it, got a puppy and never told us, tenant and puppy trashed the floors, tenant stopped paying rent). We would obviously do our best to avoid nightmare tenants, but honestly just unsure what to do.

Should we…

-Decrease the asking price of our current home? If so, by how much?

-Decide to rent out? If so, when should we have the convo with our selling agent? She technically has exclusive right to list until October. Would love to not wait that long to make a decision…

-Consider something else? We could really use the extra money for projects for our new home! Had expected to sell to have that extra money…

Thanks everyone for your thoughts! - So close to that dream home 🏠

submitted by /u/eharmonie
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source https://www.reddit.com/r/RealEstate/comments/1eon1la/closing_on_new_home_before_selling_current_one/
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