If you already own a home and are looking at buying another house, there is no doubt that you have asked yourself this question already. Unfortunately the answer is not one-size-fits-all. Each circumstance is different and you must weigh your situation carefully to decide what will work best for you. Below are some of the positives and negatives of buying a new home first, and selling your current home before purchasing a new house.
An important factor when considering buying your new home before selling your current house is whether or not you can make payments on both houses if you get into a situation where your current house hasn’t sold. This alone can be enough to make people decide to sell first (or at least get their current house under contract before making an offer on another property).
It should also be considered that if you buy first and then you become desperate to sell your existing home, you will likely start dropping the price dramatically – must faster than if you were not in a huge hurry to sell – which in turn reduces the amount of money you make.
Sometimes the “one” comes along and waiting for the current house to sell just isn’t an option, as you might not want to let the house slip away. In those instances, one should look at the market and how fast homes are selling, as well as what you need to get out of your current home, in order to make a decision. It very well may be a risk worth taking, especially if the house you want to buy is a “must have.”
Selling your current home may appear to be the less stressful option. That may be true from a financial aspect as you don’t have to worry about making two payments or dropping the price dramatically to get an offer, but selling first can come with its own set of stresses. If your house sells quickly and you feel pressure to find a home, you might settle for a house that is less than ideal.
It is possible to sell first and then find a temporary place to stay, either with family, friends or possibly even renting a home. The downside to this option is that you are then required to move twice, which can be quite an upheaval to your life, especially if you have a family.
There are things that your real estate agent can do such as negotiating a rent back situation for your old house so that you don’t move twice, or possibly a longer closing period on your current home to give you time to close on your new house. You can also make the offer on your new home contingent on your old home selling, although that can also come with stress, as you are at risk of losing your new house if another offer comes in and you are not ready to drop the contingency and move forward with the contract.
All of these scenarios are things that an experienced agent can help you navigate. A knowledgeable realtor can help you work through your circumstances and choose the path that works best for you and your situation.
I am always available to help. If I can answer any questions please call me at 208.890.1052 or email me at firstname.lastname@example.org.