27 Nov Should You Buy or Sell Your Home First?
There’s one question that’s been around real estate forever – should you buy or sell your home first?
Well, there’s a reason why that question hasn’t been put to rest, and that’s because it depends. Like most situations in life and finances, what is best for you is all situational. There are risks either way and what is best for you may not be best for someone else.
So when should you buy first?
If you are looking for something very specific and you want to wait for the right home to come on the market, it would likely make more sense to buy first. In this case, if you were to sell first, there is a good chance that you wouldn’t find that “dream home” under a tight constraint.
If you are looking in an area with a strong seller’s market. In these types of markets, it’s likely that you will have to compete on multiple properties until you secure one. You will also need to take into account what type of market your current home is in. Keep in mind that the “market” is not just a geographic area – the type of home will also play a role.
For example, if you are looking for a townhouse in Burlington under $500,000 right now, inventory is lower than the number of buyers on the market. Many homes are selling quickly (some in competition), and I would describe this as a seller’s market. If you are buying a home like this, I would consider buying first.
If you have an urgent need to be in a different home and have the financial ability to carry two properties, for you, it may make more sense to buy first. For example, if you are currently living in a one bedroom condo in Toronto and you just got a job in Hamilton. You may prefer to buy first and get settled in your new place with your new job, then deal with selling your condo. This is really a matter of preference and will really depend on your financial situation.
If you are simply more comfortable having secured your new place before you sell your current home, then buying first might be right for you.
When should you sell first?
Opposite to above, if your home is a unique property or would have some aspect that would limit the pool of buyers, it may make more sense to sell first. If your home is in extremely poor condition, if it’s a luxury property, if the layout and finishes are particularly unique, you may have a smaller pool of buyers who would suit your property and it may take longer to sell. In this case, it might make sense to sell first.
If you are selling in a buyer’s market, there are many homes on the market and homes take longer to sell. You know when you go to buy, you know there are lots of options for you to choose from. Selling your home, in this case, is the bigger unknown – when will it sell and for how much?
If you have somewhere to go if you sell your home and DON’T find a home to buy before closing. Maybe you have a second property or can stay at a family member’s home.
What’s the takeaway?
Ultimately it depends on the market for the home you are selling, the market for the home you are buying, your personal situation, and personal risk tolerance.
I’m here to be your resource to help guide you through this process. When it comes time for you to make a move, I’d love to have a consult with you to discuss what the best plan is for your specific situation. Reach out anytime!