Deciding Whether to Buy or Sell First

The dilemma of whether to buy or sell first is both common and challenging. Selling before buying may leave you in a temporary housing situation if closing dates don’t align.

Buying first could result in carrying two mortgages simultaneously.

The key is to do your research, understand your needs and budget, and consult with your REALTOR® early in the process.

If you find a new home before selling your current one, consider including a “sale of your existing home” condition in your offer. This allows you to back out if your current home doesn’t sell within a set period, though it may limit your price negotiating power.

If you sell your home before finding a new one, a “purchase of a new home” condition can be included in your sale agreement, giving you a fixed period to find your next residence.

Pros and Cons of Buying Before Selling

• Pros: You have a guaranteed place to move into, no pressure to rush home search, and can make careful buying decisions.

• Cons: Financial strain due to carrying two mortgages, risk of having to sell your current home quickly if finances get tight, and possible difficulty securing loans.

Pros and Cons of Selling Before Buying

• Pros: Greater financial security by knowing exactly how much you can spend, no burden of two mortgages, and potentially stronger negotiating power when buying.

• Cons: Potential need for temporary housing, pressure to find a new home quickly, and risk of limited inventory.

Practical Tips for Making the Decision

1. Get Pre-Approved for a Mortgage: Understand your borrowing power before making any moves.

2. Consult Real Estate Professionals: Agents can provide insight on market trends and timing strategies.

3. Consider Contingency Clauses: If buying first, include contingencies that allow you to sell your current home within a set timeframe.

4. Plan Your Moving Logistics: Factor in storage, temporary housing, and moving costs.

5. Stay Flexible: Be ready to adjust plans based on market changes or personal circumstances.

There is no one-size-fits-all answer to whether you should buy or sell first. It requires careful evaluation of your financial health, the real estate market, and your personal needs. Weighing the pros and cons and planning ahead can help streamline your transition and reduce stress. Consulting with experienced real estate professionals can provide personalized guidance tailored to your unique situation.