One of the most common questions I get as a real estate agent is "Should I sell my house before I buy a new one?" My answer is always "that depends". Although that response may sound too non committal, it true. Current real estate trends, your financial situation and your reason for moving are all important factors that can determine whether it's better for you to sell or buy first. Generally it's better to sell your current home before you buy a new one.
There are several benefits to selling your home before you buy, and in our current buyers market, it just makes more sense. Selling your home first puts you in control. By selling before you buy you'll have the luxury of time. You won't have to take the first offer that comes along (unless it's a great one!). You can decide how much to accept for your home without feeling pressured to take a lower price because your financially strapped with two mortgages. Once you've sold your home you'll know exactly how much money you can put towards your new home. And selling first removes contingencies that may otherwise keep home sellers from accepting your offer to buy their home.
Ideally it would be great if you could sell your old home and close on your new home at the same time, but life doesn't always work that way so you need to keep your options open. If you receive an offer on your home but haven't found another one to replace it, see if you can rent back your home temporarily. It's best if you make this a part of your home's sales contract so that you know up front if it's feasible. There's also the option of renting an apartment or a different home until you find a house you want to buy. These situations might not not always be convenient but if they benefit you they might be worth considering.
Sometimes it might actually be better for you to buy before you sell your current home. When Tucson saw it's sellers market between 2004-2005, homeowners could put their homes up for sale and receive an offer within a few days. Demand was high and supply was low, so sellers knew that they could buy another home without much risk.
There are other reasons to buy before you sell. Sometimes you might find a house at a price that's just too good to pass up. Occasionally homeowners are forced to sell for any number of reasons; if they're motivated and it's going to benefit you and your situation, take advantage of it! And, if you come across that home you've always been dreaming about, it might be a good idea to buy it before you lose out. If it's the perfect home and you don't make it your own, you may regret it in the long run. But before you jump in and buy, make sure that you can afford two mortgage payments. In a worst case scenario your original home may not sell for awhile, and you want to make sure you can handle the temporary burden of double payments.
There are several benefits to selling your home before you buy, and in our current buyers market, it just makes more sense. Selling your home first puts you in control. By selling before you buy you'll have the luxury of time. You won't have to take the first offer that comes along (unless it's a great one!). You can decide how much to accept for your home without feeling pressured to take a lower price because your financially strapped with two mortgages. Once you've sold your home you'll know exactly how much money you can put towards your new home. And selling first removes contingencies that may otherwise keep home sellers from accepting your offer to buy their home.
Ideally it would be great if you could sell your old home and close on your new home at the same time, but life doesn't always work that way so you need to keep your options open. If you receive an offer on your home but haven't found another one to replace it, see if you can rent back your home temporarily. It's best if you make this a part of your home's sales contract so that you know up front if it's feasible. There's also the option of renting an apartment or a different home until you find a house you want to buy. These situations might not not always be convenient but if they benefit you they might be worth considering.
Sometimes it might actually be better for you to buy before you sell your current home. When Tucson saw it's sellers market between 2004-2005, homeowners could put their homes up for sale and receive an offer within a few days. Demand was high and supply was low, so sellers knew that they could buy another home without much risk.
There are other reasons to buy before you sell. Sometimes you might find a house at a price that's just too good to pass up. Occasionally homeowners are forced to sell for any number of reasons; if they're motivated and it's going to benefit you and your situation, take advantage of it! And, if you come across that home you've always been dreaming about, it might be a good idea to buy it before you lose out. If it's the perfect home and you don't make it your own, you may regret it in the long run. But before you jump in and buy, make sure that you can afford two mortgage payments. In a worst case scenario your original home may not sell for awhile, and you want to make sure you can handle the temporary burden of double payments.
Whatever you decide to do, make sure you review your personal situation and finances so that you know what you're getting in to. One of my general rules in life is it's better to be prepared and find out a situation won't work before you commit to something you're stuck with!
1 comment:
One of the most common questions I get as a real estate agent is "Should I sell my house before I buy a new one?"
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Julie
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