How to decide whether you should buy or sell your home first.
In today’s real estate market, low inventory and high demand are dominating the conversation. It’s easy to sell, but it’s much harder to buy. Many homeowners are in a position where they need to complete both transactions in a short period. Deciding which one to do first comes down to several factors. Each route comes with pros and cons, but the right option for you depends on your particular situation.
If you need to sell your home and buy a new one, here are three key questions that you should consider before starting the process:
1. Can you afford two mortgages? If possible, most people choose the buy first, then sell option. However, qualifying for two mortgages at once is difficult and can add a lot of stress to your situation. If you can carry both payments for a few months, you’ll have plenty of time to find a new home while also preparing your current property to sell for top dollar.
There is more than one way to sell before you buy and vice versa.
2. What type of home are you buying? If you have a specific neighborhood or school district that you’re targeting, you can’t always afford to sell first from a timing perspective. You might need to make a contingent offer, use a bridge loan, or take out a home equity line of credit. It might be worth it to secure your dream home. If you don’t have a super-specific wish list for your next home, selling first might make more sense for a multitude of reasons.
3. Do you want to move twice? Most people don’t, but you might not have a choice. If you need the money from your home sale to fund your subsequent purchase, you may have to find temporary housing while you search for your next property. With rent on the rise due to inflation, that’s not always the wisest move. On the other hand, depending on how high demand is in your specific price range, you may be able to negotiate a rent-back agreement with the buyer who purchases your home and avoid the dreaded double move.
We’ve helped many clients in this situation, and we’d be happy to help you too. There is more than one way to sell before you buy and vice versa.
If you have any questions about your specific situation or real estate in general, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.