Buy First or Sell First
You have made a decision to move. You presently own your own home that no longer suits your needs. The question is should you sell your current home before you purchase your new home, or should you locate and put an offer in on your new home first. There is no one answer to this question. It depends on the market, present circumstances and to what degree you are prepared to tale the risks.
Making the decision to buy first or sell first should be made after discussing this with your real estate professional. They will advise you on current market conditions, the activity in your neighborhood and how long it can take to sell your home, the same information on the neighborhood that you are seeking to move to and the potential down side of owning two homes at the same time or having your sale close before you have purchase your new home. This may lead to purchasing a home that does not best suit your needs or is in an area that is not your first choice.
Selling your existing home before purchasing your new home has its advantages. You will know how much you are able to spend for your new home, you will be in a better position to obtain pre-approval on your next mortgage (if required), you will be in a better negotiating position when you are able to put an offer to purchase in that is not conditional on financing or the sale of your home.
When making the decision of buy first/sell first current market conditions should be one of the key considerations. In a sellers market (when prices are rising) it is a better strategy to buy first where you lock in the price of the home you are purchasing. During this market the price of your home will continue to rise. Additionally in a sellers market homes tend be on the market for a far shorter period before they sell.
In a buyer’s market (when prices are stable or falling) it is a better strategy to sell first where you lock in the price you will receive on your current home. Having sold your home and if the market continues to decline you have the ability to take advantage of the lower prices and negotiate a better price.
