June Blog - sherilleonhomes
Sherille Layton

For those looking to take that next step in their real estate future, this important question will inevitably come up: “should I buy my new home or sell my existing home first?”

While there is no ‘right’ answer, it’s important to know the potential pros and cons of both options. Speaking with your registered real estate representative before starting the buying or selling process can help you decide which route is better suited to your family’s needs.

Buying first

Buying first can make the house hunting experience more enjoyable. Without a closing date looming on your existing home, you’ll have time to wait until the right home comes up for sale. It can also be less stressful knowing that if your offer is unsuccessful, you can wait for the next opportunity to come up.

The downside to buying first is if you are unable to sell your home fast enough, you will find yourself owning two homes at once. The result could mean paying two mortgages at the same time, not to mention all the other costs of home ownership. Additionally, you may have trouble securing a mortgage for the new home. I always tell clients when they start the process of looking for a new home. To speak to their mortgage advisor to see exactly what “bridge financing” for a few weeks or a couple of months will look like.  It is the not knowing that can lead to stress. The more prepared you are the easier it will be to make informed decisions.

It is always a good strategy to buy and sell in the same market.

Sell first

The biggest benefit of selling first, aside from removing the risk of owning two homes at once, is you’ll know how much money the sale brought in, which will help determine how much you can afford to pay for the next place.

As helpful as that is to know, there is pressure with your closing date looming and potentially no home to move into. If you’re not careful, you may end up rushing the buying process and settling for a home that isn’t ideal for you, or paying more than you planned because you feel pressured.

It is always good to research the homes that you would be interested in purchasing when your homes sells, so that you are fully educated when the time comes and you have secured a buyer on your own home.

Have a contingency plan

Regardless of which route you choose, it’s a smart idea to have a back-up plan in place in case you are left with two homes, or no home, for a period of time.

If the sale of your home closes first, you might consider a short-term rental or moving in with family or friends. This could be better than settling for a less-than-ideal home because you are rushed.

Being prepared is key. As soon as I meet a client at the listing presentation, whether they are selling now or in 6 months’ time, I always have them consult with a stager soon after. You can never be too prepared going into this process. It will alleviate some stress as well. And, the more informed you are in terms of market research, being aware of the current market conditions and getting your home ready to sell well in advance, will only give you more confidence when you make that leap whether buying or selling first.

Call me if you are looking to buy or sell, we can plan and prepare – 416 419 5893.