Asking this question is the real estate equivalent of asking, “which came first, the chicken or the egg?”. While there is no right or wrong way to approach this situation, some factors may impact your decision on whether you should buy a new property or sell your current one first.
It’s best to understand your options and their benefits and drawbacks to make the best decision for you and your family.
Why You Might Sell First
- If property values are declining, you may want to sell first to get the most out of your property and then buy as the decline continues.
- Once you sell your property, you’ll have an accurate idea of how much equity you can use to purchase your next home and adjust your search accordingly.
- You can negotiate a longer closing period to accommodate your search time – as the seller, you typically have the upper hand for closing time frames.
Why You Might NOT Sell First
- If you’re unsure about moving in general and want to find a home that fits your needs and budget first.
- You might not find a home or be able to move into one before the closing date of your current home, forcing you to find temporary housing in the interim.
Why You Might Buy First
- If property values are rising and there is a lot of competition in the market, you may want to buy first to ensure you find a property within your budget, then sell it as prices continue to rise.
- You’re confident there will be a high demand for your current property.
- The current market is balanced enough that your offer can be conditional upon selling your property or offer an extended closing period so you can comfortably sell your property.
- You’re financially prepared to pay two mortgages while selling your property should you move before you sell or before new owners take possession.
Why You Might NOT Buy First
- You aren’t confident in the value or demand of your current property and need to base your budget on the equity you’ve accumulated.
- The current market is too hot for conditions or longer closing timeframes.
Market conditions can make it hard to understand which is better, but the truth is, one isn’t extraordinarily better than the other. You need to weigh the variables of each and make a decision that works best for you.
If you’re still unsure, speak to a realtor. Our job is to advise you based on our market knowledge and experience. Our team would be more than happy to give you advice or an accurate estimate of how easily your property might sell.