Do you Buy First or Do You Sell First?
It can be difficult to figure out whether to sell your home first, before you buy, or vice versa in the busy real estate market. If you sell first and haven’t found your new home yet, where are you going to live? But if you buy first without selling how can you afford to cover the cost of owning two homes if yours doesn’t sell?
If you sell your home before you buy, you eliminate the financial guessing game. Maybe you like to play but I would like to know how much money I’m working with when I go looking for a new home! The only downfall to that approach is whether you have a place to stay or not. You may not find your new home in time, or if you do, maybe the possession dates don’t line up. Then you are stuck renting for however long, and if you are a growing family with lots of stuff, maybe storage comes into play.
So should you buy before you sell? In some cases you may have to. Say you found your perfect home, and you’ve been looking for a long time. It’s priced right and it will sell fast! In this case you may have to! But if you’re dealing with a slow market, it could be very dangerous. Now you’re looking into bridge financing, which allows you to own both homes, while trying to sell yours. But think of all that interest you are paying on a hefty lump some of money.
The ideal way this transition will happen all depends on timing. If you’ve done your research, know pretty well what you are looking for and what area you want to find it in, then you want to list your home first. If you do get an offer right away you can always add a contingency clause in the contract that is conditional on you finding your new house in a certain period of time. On the other hand, if your home hasn’t sold by the time you find your new home, you make an offer subject to the sale of your existing home in a certain time period. Depending on the market and the other home owners’ situation, sellers might not accept this, but if this works you are more likely to make the dates match and you’ve already got the ball rolling on your own house.
In conclusion, selling your home first is less risky and you’ll usually end up with a better price on both ends. Think of it this way, you’re not in a rush selling, so you won’t be forced to accept a low offer, and if you’re putting an offer on a house and haven’t sold yours yet, what sort of bargaining position are you in? You’re asking the seller to have faith in you selling your house and give you a deal on the new one! This is where your professional real estate agent comes in and works with you to make sure that the whole process is as stress-free and smooth as possible.
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