This situation is not uncommon and I have had this nearly happen to a couple of my clients this year. Perhaps the market is slower at the time of reading this, or your house isn't selling for other reasons. Check out my blog 4 Reasons Your Home Isn't Selling Quickly for some suggestions.
The good news though: you have two options.
- Sell your house ASAP for whatever gets you the $$ you need to close on your new house; or
- Keep your house, take it off the market, and refinance it. Pull out the equity to finance your new home and rent your current home out.
Points you need to consider:
- There are tenants everywhere looking for properties to rent. If you can’t sell your house for what you want and are prepared to hold it for the foreseeable future (and your lender agrees), this might be a viable option for you.
- If your house is on the market and you’re debating refinancing and renting it, BEFORE you relist it for a lower price, GET YOUR HOUSE APPRAISED. If your appraiser sees that you listed for $799,000 and then went down to $699,000 to speed up the sale, you’re in trouble with the refinancing (if you decide to go down that route).
- If renting our your current home is not an option, you’re kind of in trouble. Selling your house at the current ‘market value’ likely means selling for less than you were planning on, which likely means that you’ll have a lower down payment and you might have to pay CMHC fees (if you don’t end up having a 20% downpayment). The problem is, if the house you bought is $1M or more, you MUST HAVE 20% down.
When figuring all this out, speak to a GOOD MORTGAGE BROKER who has seen this before, and knows how to navigate these problems well and of course, I know a guy, so I would be happy to share contact details with you.