By Staff Correspondent
02/05/2024
Deciding whether to sell your current home first (sell-to-buy) or buy a new home before selling your existing one (buy-before-sell) is a big decision with no one-size-fits-all answer. It depends on several factors, including:
Market conditions:
- Seller’s market: If selling houses is quick and easy, buying first might be feasible. You’ll have more leverage as a buyer without a contingency sale, but you’ll need financing for both homes.
- Buyer’s market: It’s riskier to buy first in a buyer’s market as selling your old home might take longer. You’ll likely need a bridge loan or sell your current home with a contingency clause limiting potential offers.
Your financial situation:
- Down payment: Can you afford a down payment on a new home without selling your current one? Selling first gives you access to your equity for a bigger down payment and better interest rates.
- Carrying two mortgages: Can you handle potential mortgage payments on both homes if you buy before selling?
Your personal preferences:
- Flexibility: Do you mind temporary housing or double moving? Selling first gives you more flexibility in your new home search, while buying first avoids housing transitions.
- Stress tolerance: Can you handle the potential pressure of finding a new home before your current one sells, or the pressure of selling within a specific timeframe to avoid double mortgage payments?
Here’s a quick breakdown of the pros and cons of each approach:
Sell first:
Pros:
- Secure financing with a stronger offer
- Avoid carrying two mortgages
- More flexibility in new home search
- No pressure to sell quickly
Cons:
- May need temporary housing
- Potential double moving cost
- Risk of missing out on dream home
Buy first:
Pros:
- No temporary housing
- Avoid double moving cost
- Secure dream home before it’s gone
Cons:
- Risk of carrying two mortgages
- Weaker offer as a contingent buyer
- Less flexibility in new home search
- Pressure to sell quickly
Ultimately, the best approach depends on your unique circumstances. It’s crucial to consult with a real estate agent and financial advisor who can assess your situation and recommend the best strategy for you. I hope this information helps!
