Making the decision if you should buy or sell your home first can be one of the more critical choices in your real estate process. Either option can present you with some positive or negative consequences. Making the right choice will truly depend on your personal circumstance, where the market conditions are at, and what your finances look like. Let’s investigate some of the reasons you may or may not want to go a certain way.
Buying First: Advantages and Considerations
Advantages:
- Securing Your Next Home: Having your next home purchased before letting go of your current one can bring a peace of mind that you won’t be rushed into purchasing something that you would regret. This can be especially important if you have housing needs that are more specialized or particular and any old home just won’t do.
- Avoiding Temporary Housing: Moving is listed as one of the top stressors in someone’s life. It can be helpful for your mental state of mind to not have to go through this process twice in a short amount of time. You also save money by not having temporary rental costs stacking up as you are looking for your next home.
- More Negotiation Power: You often come to the table with more negotiation power when you don’t feel the pressure to sell your home quickly. Sellers will often entertain offers when they know you are not rushed.
Considerations:
- Financial Strain: Most families and individuals are not financially set up to carry the weight of two mortgages at the same time. This added stress can hinder a lot of other areas in your life, such as health and relationships. Career performance might also suffer with this added financial strain.
- Contingency Offers: Unless you have excess finances to play with, you most likely will need to make an offer on a new house contingent on the sale of your current one. Sellers might not wish to gamble with your offer if it’s a competitive market.
- Risk of Owning Two Homes: If your current home doesn’t sell quickly, you could end up owning two homes at once. This means double the costs and responsibilities not only in the normal things like the mortgage and taxes, but potentially also in repairs if something were to break.
Selling First: Advantages & Considerations
Advantages:
- Clear Financial Picture: When you Sell your home first, you will now have a clearer budget of how much you have to spend on your next home.
- Avoiding Double Mortgages: Selling first may be very important if you’re using the profits from your current home to fund the purchase of your next.
- Greater Flexibility: When you have your home sold, you’re in a more solid position to be able to competitively offer on the next home you have your sights set on. You can also move with more flexibility, knowing exactly when you need to leave your current residence.
Considerations:
- Finding Temporary Housing: The stress and expense of finding a temporary place to live may just not be worth it. This inconvenience is a major reason why many chose to sell first.
- Pressure to Buy Quickly: After selling, you may find that you are putting pressure on yourself to find and close on a new home quickly. Hurried decisions are usually not the best ones.
- Market Conditions: In a seller’s market, you may get a good price for your current home but face difficult competition in finding a new one. In a buyer’s market, you might sell for less but find better deals on new homes.
Strategies to Navigate Both Options
- Bridge Loans: A bridge loan is a short-term loan that assists those who need temporary finances. This can remove some of the pressure of supporting two properties.
- Rent-Back Agreements: The buyer of your home might entertain a rent-back agreement if you need more time before moving out. This could also be a win-win solution if they are not in the need of moving in directly and could benefit from the rental amount you agree upon.
- Work with a Real Estate Agent: Above all, a real estate agent who is an expert in their field will have insights into current market conditions and can help you navigate the many ups and downs of buying and selling concurrently.
Call us today so that we can walk you through our Guaranteed Sales Program. You win no matter what.