Selling your old home and concurrently buying a new one might seem to be the best choice, but it isn’t always easy to do so. Right now, it’s a seller’s market, with less inventory available than there is demand for it. If you’re listing your home for sale, you may find that you get one or more offers more quickly than you were expecting – which could leave you in a position to sell your home before you have a new one to live in.
There are some compelling reasons to sell your home before you buy another, not the least of which is that it will put you in sound financial position to go looking for a new home with money in hand from your sale. You’ll be ready to make an offer as soon as you find something you want. Here are a few other benefits of selling your home before you have a new one in your sights:
Time – You aren’t going to have to look for a new home with the pressure of knowing you have to find something quickly, which means you’ll be less likely to settle. You can take your time finding the perfect property that has everything you’re looking for.
Leverage – By selling before you need to move into a new home, you won’t be in a position to have to accept the first offer that comes in if it isn’t attractive to you – after all, you won’t have a reason to have to make a quick sale. Likewise, when you do decide to buy a new home, you will have more negotiating power if you are putting an offer on a home without the contingency of having to sell a home you are currently living in. In short, you won’t appear desperate to a seller, which may mean the seller will accept a lower sales price.
Flexibility – If you are living in temporary housing for a brief amount of time, you can store your belongings and they will be ready to move just as soon as you take possession of your new home. By renting, you give yourself plenty of time to get things right and find the home of your dreams. And if you’re unwilling to rent something in the interim, in a seller’s market, you may have flexibility to negotiate with your buyer for more time while you search for a new house for yourself. Another possibility is the option of renting your current home from the new buyer (a sale-leaseback agreement) while you conduct your search..
Selling your current home before buying another is certainly preferable to buying a new home without having sold your old one and potentially being stuck with two mortgage payments – which can be tricky to finance and ultimately be hard on the bank account. But before you set out to sell, be sure to consult your real estate agent to determine the best approach to take.