What Comes First, Buying or Selling Your Home?
It can be said that this is the chicken and egg question of the real estate world. If you already own a home and are planning to move to a new one then you will get stuck on the same question. Should you buy a house first and then sell your house or should you sell your house first and then buy one? Ideally, you would be buying and selling them at the same time, but that maybe harder than it sounds. It can take months to buy or sell a home which puts people in a predicament.
There is no single answer to the question which will be right for everyone; the right answer depends totally on the market and your own personal situation. Below are a few tips that hopefully help you at least get you started with your decision.
Are you in a seller’s market or a buyer’s market?
When many houses are available for sale but buyers are few, the market is referred to as a buyer’s market, because buyers have leverage. When few houses are available and many buyers are trying to buy them, it is called a seller’s market for the same reason. Durham Region is currently in a seller’s market so sellers have more leverage. This means selling will be easy but buying may take some time so it may be better to buy first and sell later. Before you decide you should talk to your team of experts including your Realtor and Mortgage lender. Make sure you have all the information and that everyone is on the same page.
Bridge loans can be a great way to avoid having to pay off two mortgages. This is the main fear of people that they will be making two payments if they don’t sell first. The issue is very common which is why banks offer bridge loans; basically, they agree to allow you to carry two mortgages for a short period of time, this filling in the “gap” between buying and selling of your home. It might be a good idea to talk to your lender before you make a decision to buy or sell first.
If you decide to sell first, it might be a good idea to have some temporary living arrangements prepared. Buying a house in a rush and under stress is something we would never recommend. If you already have a plan in case you need to move but haven’t bought a house, you will not be under the stress. This will really help take the emotion of buying a house.
If you are looking at buying before you sell, you may want to consider a conditional offer. Have your Realtor insert a condition of the sale of your home first before your purchase becomes firm. Essentially this will allow you to put this house on hold while you sell your house. That being said, in a seller’s market, a condition like this is not easy to pull off. In a seller’s market the home owner will likely have other offers to consider without this condition.
At the end of the day, what you really need to do is talk to a Realtor. Explain your situation with them early on in the decision making process. Your Realtor will be able to provide you with some information on the current market and allow you to make a safe and informed decision on whether to buy or sell your home first.