Homeowners: Should You Sell or Buy First?
If you already own a home, and are looking to move into a new one, the decision to sell your house before buying a new one is tough. In general, the best strategy will depend on your personal situation and the conditions of your local real estate market. We hear this question a lot, and since there is not a single strategy for all clients, we always end up answering it with our clients, not for our clients.
The first step to deciding whether to buy or sell your home first is to consider the reason(s) why you are moving.
- Do you have a very specific type of home in mind?
If you're looking for your "dream home" or need very specific features, and you won't move until you find the perfect home, it's likely that you'll have to buy before you sell. Obviously the risk here is owning two homes for an extended period of time. Another problem with buying first is that you quickly become very motivated to sell your old home, and you may feel pressure to accept offers you wouldn’t have considered otherwise. This is why we rarely recommend buying first.
- Would showing your current home to potential buyers be a problem?
When your home is listed for sale, people need to be able to view it, and it needs to look great whenever potential buyers come through. Showing requests are often made on short notice, and if you have a house full of kids, pets, or tenants, showings might not go very well. If it’s likely that we can sell your home for a higher value, if you’re not living in it, we may recommend that you move out before it’s listed.
- Are you building a new home?
The biggest risk and opportunity with building, is what happens to the real estate market between the time you decide to build, and the time your home is complete. If you keep your current home while your new home is being built, and the market drops in the meantime, you’ll have a much bigger gap to cover between the price of each than you may have planned for. On the other hand, if the market improves you may come out ahead.
So, What Is A Possible Solution?
We often find our clients are comfortable with the following solution. We start by having a registered Realtor® evaluate your current home and provide recommendations on how you can improve your property’s value. This will give you a good idea of what you can afford, and what you need to do to get ready to sell.
Next we take a look at a number of homes on the market in the price range you’re considering. If you feel comfortable that you could find a home you’d like, we put your current home on the market and see how it goes.
What About A "Sale of Home" Condition?
When you make an offer on a home, you could indicate on your offer that it is conditional upon the sale of your current home. However, it can be difficult to get an offer with a "sale of home condition" accepted by the seller.
If your home is already on the market, is well priced, and is being actively marketed, it may be easier to get this type of offer accepted than it would be if your home is overpriced, or not even on the market yet. Keep in mind, if the "sale of home" condition is necessary, you may have to be more flexible in other areas during negotiations, such as price.
In the end, there is no "right solution" for every situation and one of our qualified real estate experts would be happy to discuss your situation anytime. Call us at 780-486-8655 or complete our contact form online.