SHOULD I SELL FIRST OR BUY FIRST?
Dilemma: ‘If I buy first, I might not be able to sell my current place and, if I sell first, I might not find a suitable property to buy. So what to do? Here is a foolproof way for you to decide:
Determine which of the following would be the most difficult for you right now, in today’s market, wherever your home may be located. Would it likely be more difficult for you to sell your home or more difficult for you to find a home to buy that fulfills your needs?
Then do that which is most difficult, first.
Hint: No matter which you do first, plan the timing of both your purchase and sale to occur in the same marketplace. For example, selling now and planning to wait a considerable amount of time before buying risks having the price range of your desired property type increase beyond your budget. Similarly, to buy now and sell well down the road does run you the risk of having to sell for less than anticipated should there be a market shift lowering prices during the interim.
Advantages to Selling First
The luxury of time presents No stress to sell for an amount less than you find acceptable.
You will know exactly how much money you have in your pocket for buying.
You will know precisely when the buyer gets your house (you can time the closing of your purchase to minimize the need for bridge financing).
You avoid the stress of not being able to sell.
Disadvantages to Selling First
You must contend with the pressure of not yet having found a place to buy and potentially having to make a rushed purchase.
Hint if you go this route: Sell with long closing to give yourself lots of time to find the right house to buy.
Advantages to Buying first
You are not under the gun to make a hurried buying decision because your current home has been sold. You can wait for the perfect house.
You can review with your Realtor things that could be done to your current home to maximize its value and you would have the additional time to do these things while in the process of looking for your new home.
Disadvantages to Buying first
You don’t know the exact amount that you will be receiving from the sale of your home.
You could be subjecting yourself to the pressure of having to sell because you have already bought.
Hint if you go this route: Buy with a long closing. However, make certain that the budgeting figure you use as a selling price for your home is realistic.