Should you buy or sell first? If you’re a homeowner and are planning on moving soon, you are probably asking yourself this question. It’s important to know that there are advantages and disadvantages to both of these options.
There are several reasons for buying a home first. Buying first may be advantageous if you’re planning long-term travel for work, if you find the property of your dreams or if you learn about a real estate opportunity that’s hard to pass up. By buying first, you have the advantage of knowing the date of the transaction and your moving date – which is useful information for the future buyer of your property. Unless you have excellent credit or a significant amount of disposable income, be aware that regardless of the reasons that lead you to buy first, you will most likely need to make a promise to purchase that is conditional on the sale of your home. However, if another buyer also shows an interest in the same property, you will have to either withdraw this condition or your offer to purchase.
If you sell your home before buying a new one, you will know the exact date that your buyer is taking possession of your home, which gives you a deadline for taking possession of your new property. You also know how much money you have in hand in order to finance your next home, which is important information if you need to take out a new mortgage. Without a financing condition, selling your home first puts you in a good position to negotiate with sellers.
Your real estate broker will help you determine the best option for you, based on your personal situation, current market conditions and the type of property you’re selling.