Today, let’s tackle one of the classic conundrums in real estate: should you buy a new home before you sell your current one, or is it wiser to sell first and then buy? There is no correct answer to this question since the choice will rely heavily on your personal situation and the current market conditions, however, both options have pros and cons, so let’s break it down together.
Buying Before Selling
More Choice: You can take your time finding the perfect new home without feeling rushed to make a decision.
Stress-Free Transition: You can move into your new place at your own pace without the pressure of a tight timeline. No need to worry about temporary housing or moving twice.
Loss of Negotiating Power: If you are highly motivated to sell because you have already purchased a home, you are in a weaker position when negotiating the terms of the sale of your own home. You also are in a weaker position as a buyer if you need to include a “subject to sale”.
Possible Financial Strain: There is a risk that you could end up carrying two mortgages at once if your home doesn’t sell in time. Bridge financing may be an option, but it is expensive.
Clear Budget: You know exactly how much money you have to spend on your new home.
No Double Payments: No need to worry about paying two mortgages simultaneously.
Stronger Buying Position: With cash in hand, you can negotiate more effectively on your new home.
Housing Gap: You might need temporary housing if you sell before finding a new place, which can be inconvenient and costly.
Pressure to Buy: The urgency to find a new home quickly can lead to rushed decisions and settling for less.
Market Uncertainty: The market conditions might change between selling your home and buying a new one, potentially impacting your buying power.
Both options come with risks, so it’s essential to weigh them carefully. If you’re buying first, I recommend talking to your mortgage broker and asking them to provide you with options in the event things don’t go as planned. What would carrying two mortgages at once cost? Do you qualify for bridge financing? You need to be prepared for the worst possible outcome and if you can’t afford it, it’s not an option.
On the other hand, if you’re selling first, have a plan for temporary housing and be prepared to act quickly when the right home comes along. Ultimately, it comes down to what makes you more uncomfortable: the stress of owning two properties at once, or the pressure of finding the right home on a deadline?
Feeling overwhelmed? Don’t worry! I’m here to help you navigate these decisions and make the process as smooth as possible. Whether you're buying, selling, or just need some advice, feel free to reach out to me. Let’s work together to find the best strategy for your unique situation.
Buying Before Selling
Pros:
More Choice: You can take your time finding the perfect new home without feeling rushed to make a decision.
Stress-Free Transition: You can move into your new place at your own pace without the pressure of a tight timeline. No need to worry about temporary housing or moving twice.
Cons:
Loss of Negotiating Power: If you are highly motivated to sell because you have already purchased a home, you are in a weaker position when negotiating the terms of the sale of your own home. You also are in a weaker position as a buyer if you need to include a “subject to sale”.
Possible Financial Strain: There is a risk that you could end up carrying two mortgages at once if your home doesn’t sell in time. Bridge financing may be an option, but it is expensive.
Selling Before Buying
Pros:
Clear Budget: You know exactly how much money you have to spend on your new home.
No Double Payments: No need to worry about paying two mortgages simultaneously.
Stronger Buying Position: With cash in hand, you can negotiate more effectively on your new home.
Cons:
Housing Gap: You might need temporary housing if you sell before finding a new place, which can be inconvenient and costly.
Pressure to Buy: The urgency to find a new home quickly can lead to rushed decisions and settling for less.
Market Uncertainty: The market conditions might change between selling your home and buying a new one, potentially impacting your buying power.
Navigating the Risks
Both options come with risks, so it’s essential to weigh them carefully. If you’re buying first, I recommend talking to your mortgage broker and asking them to provide you with options in the event things don’t go as planned. What would carrying two mortgages at once cost? Do you qualify for bridge financing? You need to be prepared for the worst possible outcome and if you can’t afford it, it’s not an option.
On the other hand, if you’re selling first, have a plan for temporary housing and be prepared to act quickly when the right home comes along. Ultimately, it comes down to what makes you more uncomfortable: the stress of owning two properties at once, or the pressure of finding the right home on a deadline?
Feeling overwhelmed? Don’t worry! I’m here to help you navigate these decisions and make the process as smooth as possible. Whether you're buying, selling, or just need some advice, feel free to reach out to me. Let’s work together to find the best strategy for your unique situation.