Deciding what to do with your current home when considering buying a new one is a common dilemma for homeowners, and sadly, there’s not a fixed answer. The right choice will depend on your financial situation, market conditions, and personal preferences, but we can still try and see if any option is better than the other:
Benefits of selling first:
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Financial clarity: Selling first gives you a clear picture of your budget for the next home. You’ll know exactly how much equity you have to put toward the purchase.
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Stronger negotiating power: Without a home to sell, your offer on a new property is more appealing to sellers. Many sellers prefer buyers who don’t have a contingency to sell another home.
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Avoiding two mortgages: Carrying two mortgages at the same time can be stressful. Selling first eliminates the risk of paying for two homes at once.
Challenges of selling first
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Temporary housing: If you sell before finding a new home, you may need temporary housing. This could mean renting or staying with family, which can be inconvenient.
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Pressure to buy quickly: Without a permanent home, you might feel rushed to buy, leading to compromises on your next property.
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Market fluctuations: Home prices can change while you are between properties. If prices rise, you may end up paying more for your next home than expected.
Benefits of buying first
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Smooth transition: Buying before selling allows you to move at your own pace. You can transition seamlessly without the need for temporary housing.
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No rush to find the perfect home: You can take your time searching for a home that truly meets your needs without feeling pressured by the sale of your current property.
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Potential for market gains: If home prices are rising, buying first locks in a lower price before values increase further.
Challenges of buying first
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Financial strain: Owning two properties at once can be a financial burden, especially if the market is not the most stable at the time.
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Possible contingency complications: If you make an offer contingent on selling your home, it may be less attractive to sellers, reducing your chances of securing the home you want.
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Risk of not selling quickly: If your current home doesn’t sell as fast as expected, you could face extended carrying costs for both properties.
We can say that in a seller’s market, where homes sell quickly, buying first may be more manageable. Yet in a buyer’s market, where selling can take longer, selling first might be the safer option. So keeping up to date with the current market situation will be your best resource.
And if you’re unsure which path is right for you, working with an experienced real estate agent always can help.
Kelli Eggen.
