Contemplating a move as a homeowner? You've undoubtedly grappled with the age-old conundrum: should you sell your current home before diving into the purchase of a new one, or should you secure your next property first?
The choice you make here is deeply personal, contingent on your individual financial situation, risk tolerance, and the ever-changing dynamics of the housing market. For some, adhering to a strict timeline or budget may lead them to find solace in selling their current abode first. Conversely, those with greater flexibility may opt to procure their new dream home before parting ways with their existing one.
If you're teetering on the fence, uncertain about which path to take, allow us to offer some valuable insights to aid you in this pivotal decision-making process.
Choosing to Buy Your New Home First
For prospective homebuyers in search of a specific property and eager to ensure a predictable moving timeline, acquiring your new home first might be the ideal course of action.
Opting to purchase your next home before selling your current one grants you the luxury of time to explore the market and pinpoint your desired property. This approach is especially beneficial if you have specific preferences like a particular neighborhood, school district, or particular features you're unwilling to compromise on. Once you've successfully secured your new haven, you'll have a firm closing date, simplifying the coordination of your current residence's sale.
However, the primary advantage of buying first comes with a caveat: you'll face a tight timeline to prepare your current home for sale. This means updates, staging, and marketing must occur within a predefined window, which can potentially be quite brief. The downside is that if you can't sell your property swiftly, you might find yourself shouldering the burden of two concurrent mortgages. While bridge financing offers a temporary solution for covering payments on both your new and old homes, it's an expensive option and isn't viable if your property remains unsold.
Buying a new property before selling is most suitable in a seller's market, where demand surpasses supply, increasing your odds of a quick sale. For those constrained by a strict budget and dependent on the sale of their current home to determine their purchasing power, this route is generally inadvisable.
Opting to Sell Your Current Home First
If you're someone who prizes financial certainty and insists on having your current home sold before diving into a new property purchase, then selling your home first is the logical choice.
The most apparent advantage of this approach is that it provides a clear financial picture before you embark on your next property hunt. Once you've sold your home, you'll know precisely when your closing date is and how much you can allocate toward your new abode. This is particularly crucial if you're relying on the capital from the sale of your current property, or if you lack the financial capacity to bridge the gap between the two homes.
However, selling your home first can exert pressure to expedite the purchase of a new residence, especially in markets with limited inventory. In such cases, homeowners might feel compelled to snatch up whatever property is available, potentially compromising their preferences. If your quest involves a highly specific property that demands more time to locate, selling your current home before buying might not be the wisest course. Nevertheless, if you lean toward selling first, it's advisable to have a contingency plan in place in case you can't secure a new home promptly. This might involve temporarily residing with family or friends or arranging for a short-term rental.
Leveraging Your Realtor's Expertise
Whether you ultimately decide to buy or sell first, your trusted real estate agent is a valuable resource who can help you navigate this pivotal decision. They will outline each scenario, assess your unique circumstances, and consider the current market conditions to determine which option aligns best with your goals. Rely on their expertise in deciphering local market trends to guide you toward the most suitable choice.