3) Selling or Buying a Home First?
It’s challenging to find that sweet spot of selling your home while simultaneously buying a home and having the timing lined up perfectly. In case you are planning to (or have to) sell your home first or buy a new one first, here is what you should know:
Selling your current home first is usually the most practical situation. This avoids a rushed sale because you aren’t worrying about making two mortgage payments for an extended period. If you have a young and growing family, you want to be particularly conscious of avoiding the stress of two mortgages.
Likewise, if you are a retiree and downsizing, your income sources are limited, so it is helpful to sell before you buy. Selling first lets you make a stronger purchase offer. You aren’t making an offer contingent on selling your home. You know your sale profit, which lets you know how much home you can buy.
Selling first does have a few drawbacks. You may be tempted to make a rushed home purchase. There’s the possible burden of moving twice—you may have to move out of the old home into temporary housing. Then there’s the second move into your new home. Temporary housing can get expensive if you don’t find a new home quickly.
Buying first also has its advantages. In a buyer’s market, it gives you the chance to secure the home of your dreams. You control the timeline when you aren’t worried about where you’re moving to.
Buying your new home first means that you won’t have to relocate two or more times. You can move out of your old home right into the new one. It’s more convenient because you won’t be rushed. It also gives you time to prepare your old home for sale by doing minor repairs and staging it to maximize its value and to do repairs and renovations to your new home before you move in.
The disadvantages of buying first are mostly financial. You may rush to sell your home because you want to avoid the strain of making two mortgage payments. You may not have time to wait for the best offer.