If you have a property to sell, you might be faced with a common predicament: ‘How do I know how much I can afford to buy if I don’t know what I can sell my current place for and, if I sell first, what if I don’t find a suitable property to buy’. So what should you do?
If you currently own a home and are looking to make a change it’s best to meet with a Realtor to discuss your circumstances, what is prompting the move, where you would like to move etc. Generally, I recommend doing the most difficult option first. For example, in a seller’s market I would suggest that you buy first because it might take some time to find a house given our low inventory levels. Below are the advantages and disadvantages to each:
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 is in your pocket to buy.
- You will know exactly when the buyer gets possession of your home or condo (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.
Disadvantage to Selling First:
- Pressure of not yet having found a place to buy and potentially having to make a rushed purchase.
- If you decide on this route, the longer the closing the better.
Advantages to Buying First:
- You have spent all the time necessary to calmly find, negotiate and secure your dream home.
Disadvantages to Buying First:
- You don’t know exactly how much your home will sell for.
- Pressure of having to sell when having already bought.
- If you decide on this route, buy with a long closing.
No matter which you do first, plan the timing of both your purchase and sale to occur in the same general time frame. However, each person/situation is different so it’s best for us to sit down and discuss a plan that works best for you as early into the process a possible. Contact me here to discuss.
You may also be looking into which neighbourhood is right for you? Read my tips on the best way to see what area is right for you.