Thinking about selling your first home or buying a new home before selling it? You have to consider many things before taking any step. Navigating real estate can be tricky.
Let’s navigate them based on each choice and their respective possibilities.
Selling a house first – What does this mean?
If your plan is to sell your home first, you need to consider these points:
- It’s a big chance to take because not only will you sell the house but you will have to arrange for a temporary stay somewhere else.
- Finding short term housing can be quite stressful
- Moving two times can be expensive
- If the market prices change and the timing is not great, you might end up paying a higher price for the new home.
- Even if you set a budget for the new home, you can’t really fix an approximate home value if the market prices are constantly changing. This might impact other budgets you might have set aside.
- You might need to consider extending the closing period.
Buying a new house first – What does this mean?
If your plan is to buy a new home first, you should consider this:
- You might end up paying for two mortgages instead of one. This becomes tiresome and financially hard especially if it takes longer than estimated to sell the old house after buying a new one.
- Getting your finances in place can be tricky. Check out if you need to dip into your savings, secure a HELOC or to get a bridge loan.
- You don’t need to move twice.
How can you make buying before selling work?
- First, make a contingent offer.
- You can also use a short-term loan to make an all-cash offer.
- Find a real estate company that has a program where buy before you sell – no double moves, no double mortgages.
- You can rent your previous home to cover the mortgage expense.
- If you’re comfortable, you can always work with a local lender and be backed by him.
Make a choice that works the best for you. Keep in mind that you need to get your finances in order. It’s not always easy to move twice, pack your furniture twice or get caught up in a short-term rental.
Whether you decide to sell your home first or buy a new one before selling depends on your financial situation, personal preferences, and the state of the real estate market. Selling first offers the benefit of clarity, as you know exactly how much you have to spend on a new home, but it can also come with the stress of finding temporary housing and managing market fluctuations. On the other hand, buying first provides stability and avoids the hassle of moving twice, but it can lead to the financial strain of managing two mortgages. Weighing these pros and cons carefully, alongside your finances, will help you make the best decision for your unique situation.