Are you trying to decide whether you should buy a new home, or sell your existing one first? Answering the question can feel like picking between two vials of poison! Well, maybe it’s not quite that dramatic, but when it comes to which to do first, 95% of clients who already own a home wind up doing the same thing. They buy first, then sell later. Here’s how they arrive at this critical decision.
First, you have to decide if you’re going to buy a new home first. This decision can impact your finances, since you may wind up owning multiple homes for a long period of time. You’ll likely wind up paying two mortgages! While this isn’t ideal, many homeowners do wind up buying a new home and transferring their title on the existing house within the same day. So, how do you arrive at that point? Consider these two strategies:
Buy and Sell a Home Simultaneously
One method to align closing on both homes at once is to work on buying a new home while you’re also getting your house ready to sell. After you’ve set up a contract to purchase a new home, you immediately list your existing home and have it listed right away. By preparing your home to sell while you’re buying a new home, you can help shorten the time between closings, possibly achieving both closings on the same day.
Delay One Closing
You may be able to ask the sellers of your new home to close two or three months down the road. Depending on their ability to delay a closing date, you may be able to sell your home in the interim time. This could allow you as much as a month to sell your home before needing to close on both properties.
If you’re ruminating on the risk of purchasing a property before selling your existing home, it’s worth considering the challenges that come along as a result of selling first. If you sell your home first, you may be (metaphorically) shooting yourself in the foot. If you sell your home first, you’ll need to move quickly to find your next dream home – and you may be living in this new home for decades!
You may not mind finding temporary housing. You might not mind having to move into an apartment or temporary home, and then moving again a short period of time later. If that’s the case, perhaps you can employ this strategy.
But, consider the benefits of selling first: It helps you understand how much money you’ll have to buy your next home. It can also allow you move straight from one residence into another one, without finding temporary housing. You may even qualify for our Buy Before You Sell program, which can help you purchase your next house before you sell your current one.