Should I sell my house first or buy a new home first?
There is a lot of paperwork and certain technicalities that come with selling or buying a property, and they should never be overlooked because they can consume a lot of time. It’s advisable to have the right realtor that knows the many advantages and disadvantages of both options, before choosing the right way forward. Consulting with a professional real estate agent will help you in understanding the current situation in the real estate market of your area and the right variables that will eventually determine the best course of action for you.
Selling a home first
Selling your home first can be a positive in terms of knowing what your current budget will be before you start shopping for a new property. In fact, if you buy a new home without selling your current home first, you may end paying for two mortgages and incurring the expenses of owning two homes at once-even if it’s just for a short period.
Another benefit of selling your current home first is that you won’t be under any pressure to close the sale within a certain deadline. Being rushed in any process typically leads to less positive results. Focusing on selling your current home first, assures you of having enough time to stage it properly in the real estate market and wait for the right price. On the contrary, if you buy a new home before you sell your current one, you might be pressured to lose money on settlement day by settling for any offer that comes your way (instead of waiting out the process properly).
The downside of selling your home first is that you’ll have to find a temporary place for accommodation, in case you’re unable to buy a new home immediately. This can be very painstaking, stressful and costly because you’ll have to make a full move more than once. The unnecessary expenses on hotel bills, moving and paying for storage space can go up quickly and be very expensive in the long run. However, the right real estate agent may be able to renegotiate an extended settlement to allow you to stay for a certain period until you buy a new home.
Another potential downside is that prices in the real estate market may go up quickly between the time you sell and the time when you intend to buy a new home. Once again, it’s pivotal to know know the right agent who understands current conditions.
Buying a home first
This is a safe option for people who don’t have financial constraints because it ensures that they will have a place to stay immediately after the sale has been finalized. Furthermore, if you can afford to buy a house first before you sell your current home, you won’t have to deal with storage space or accommodation costs. It can also allow you to take time to stage the house and wait for the best market prices before you sell.
The major drawback of buying a new home first is that you need to be financially stable enough to buy a new home before you sell your current one. You will also have to pay higher taxes and mortgages because you’ll likely be owning two properties at the same time. Furthermore, you’ll be required to put down some deposit money for the new home that might be hard to raise if you have not sold your current home.
Another disadvantage is that you can’t be sure that you will recover the full cost of buying a new home from the sale of your old house. A possible option is to rent out your old home so as to recover some of the costs you may experience during this period. You can also opt to take up a bridging loan for a limited short-term like 12 months to help you in neutralizing your financial status.
While ultimately the decision to sell or buy first is up to you, being equipped with the right knowledge and information from an informed agent can absolutely be the difference between a more calm, less stress induced experience that helps you keep money in your pocket at signing; versus a frantic, and stressed out approach that ends up costing you money (and regret) at signing.