The Buy First or Sell First Dilemma?
As we approach the spring market many of us will be looking to make a move to a new home. One of the major dilemma's that we all face is should we purchase our new home before selling and take the risk of owning 2 homes or should we consider selling our existing home and take the chance of not finding a new home?
Every situation is unique just like every home is unique, however the short answer is, you want to make the right choice that will give you the best opportunity to purchase the home you want, while maximizing the value of your exisitng home. I strongly suggest that selling first is a better option in most situations. This allows you the freedom to control your timeline for moving, and you are under less pressure to accept an offer that isn't at market value. Once your home is sold, you will have an exact budget and timeline to work with that will allow you to have a stronger offer and therefore more negotiating power when you purchase. A typical timeline is 60-90 days for possession, so if you work on the longer end of that you will provide yourself ample time to purchase and move into your new home.
Should you decide to purchase first and sell second, you will need to determine your financial ability to own 2 homes. Although you may never actually own the 2 homes at the same time, when obtaining your mortgage they will want to know that you qualify for the debt you are signing up for. This can be tricky and stressful as you have found your dream home but don't qualify for the financing. You can make your offer subject to the sale with a 24 or 48 hour clause, however this clause only gives you the first opportunity to buy the home if the owners receive another offer that is acceptable to them. You would then have 24/48 hours to remove all your conditions and purchase the home if you had not sold your own home or step away from the purchase. Hence my recommendation for selling first.
Each situation is unique and is best to take the time to discuss what works best for you and your family.
Doug Court is a professional sales associate with Re/max executives realty in Winnipeg, Manitoba, Canada He is been an award winning salesman since 1987.
Doug can be reached at 204-292-9090
