Sell first or buy first?
Find out the answer to the most common dilemma for home movers.
It’s housing’s version of the classic chicken-and-egg conundrum.
Which comes first: Do you sell your existing home before you sign a contract on a new house or do you buy that new place first and then put your old house on the market?
Obviously, the choice is a highly personal one, one which involves at least some degree of danger. If you sell first and can’t find a new house that fits your bill, you run the risk of losing your buyer. But if you throw all caution to the wind and buy your new home before you sell your current digs, you could be stuck with two mortgages.
But there doesn’t have to be a lot of tension — not if you plot out your course of action with a professional who knows their stuff.
There are always exceptions, but the popular wisdom among estate agent professionals is that it’s usually most practical to sell first, then buy. If nothing else, they say, selling first puts you squarely in the driver’s seat, both coming and going.
For one thing, you won’t be facing any self-imposed deadlines. You can hold tight for the best possible price for your current home for as long as you want. If, on the other hand, you’ve already bought that new house, you could be forced to accept less than you need to make the next deal work.
But that advice holds true mainly in situations in which you are buying an existing home. If that’s the case, you’ll be in a much better bargaining position. Sellers are far more likely to negotiate with a solid buyer who doesn’t have another house to sell or doesn’t have enough cash on hand to go to settlement unless he sells his current house.
Most sellers don’t like taking their homes off the market for a “maybe.” Some won’t even accept a contract that is “contingent” on the wanna-be buyer selling his or her current house.
But if you are purchasing a new home, one built from scratch on the lot of your choice to your own specifications, you should have plenty of time to sell your current digs after you’ve made your choices and signed the contract with the builder.
Of course, the vibrancy of your local housing market will go a long way toward allaying the fear of being stuck with two places. If houses are selling briskly, you should be in good shape — as long as you price your old place realistically.
We’re here to guide you through the process with expert knowledge of the industry and friendly advice-giving agents.