By Piotr Golinski
A little while ago, we wrote about how making the choice to buy before selling was a great choice to make in real estate, but with the changes in market conditions, that option is just not ideal for many people and so, depending on circumstances, selling first actually makes more sense. So in this spirit, here are 5 reasons to sell first before buying your next property!
1. You know the exact dates you need for your purchase because you’ve already sold and agreed on dates with your buyers.
This means less guesswork and the ability to plan things out to the exact day including things like trucks/vans, hired or volunteer help, and any other services you may need to book in advance to make the move possible. Knowing the exact move out date will also help to minimize and eliminate bridge financing payments.
Speaking of, your mortgage broker also doesn’t need to work off of an “estimated” sales price for your home, and can more accurately estimate what you can purchase. This is a big deal because you don’t actually know what you’re going to sell for. At the end of the day, once you do sell your home, you may have been able to purchase more or actually be stretched too thin if your expectations for selling were too high. Knowing exactly what you can afford is a valuable bonus for selling before buying.
2. You have alternative living options, and can bunk at a friend or family’s place if you don’t find a home in time:
If your current home has a quick close and you’re not so sure that your dream place will line up, then do you have alternative living options? Is your sale more about the price or the dates? If you’re worried about being homeless, then selling before buying may not be for you. With that being said, your realtor can certainly negotiate a longer close for your sale, and it’s really not always about the price for everyone – but more about meeting in the middle with price and dates.
3. Your property is in high demand with low supply, and your next home is the opposite:
If the home you’re looking for doesn’t have the same kind of demand that your current one does, then it should be an easier transition into and the ball should be in your court. If you don’t think that your new home is going to be a difficult purchase, then you have some flexibility when it comes to selling first. By selling your more in-demand home first, you are guaranteeing to get the most for it before demand decreases. The more you can get for your sale will also mean more money you can use towards your next purchase.4.You avoid the stress and costs of your home not selling and paying two mortgages:
When you’re selling first, you know that you’ve already sold – which means that you know that you’re not going to have to pay two mortgages at once! This is a big stressor for people even if you financially can handle it (temporarily) because it’s just draining money and possible savings. If you don’t have the financials or the risk tolerance to keep two mortgages going (which most people don’t), then selling first may be a better or only option.
To sum, everyone is in a different life situation and there is no single way to participate in the real estate market and realtors can serve as the north star to guide you through the confusing waters. For some people, selling first makes the most sense. You want to know that you won’t be paying for two mortgages and have your life split apart between two properties for even a day. The number are already crunched and there’s less guesswork which means more realistic goals and timelines for your next purchase. If you’re confused about what’s best for you, drop us an email and we’d be happy to discuss your real estate goals with you.