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Should I buy or sell first?

Should I buy or sell first? Depending who you ask, you will get a different answer and both sides have valid points. Let’s look at each side and weigh their merits. Then when the time comes for you to decide, you can make an educated decision.

Let’s look at buying first.

Over the past several years buyers have had a very difficult time purchasing a home. In some cases they have put offers in on numerous homes but get outbid. The process of buying a home can be a long one. If you had sold your home, the closing day could be set 60 days from the time you accepted the offer. That leaves you 60 days to find a new home. Some people have stretched their closing out to 120 days but that is not as common. Even at 120 days, I have seen it take much longer to win in competition right now. I have several clients, and have spoken with several others who have been looking for close to a year, and not for lack of trying. Can you imagine as the closing date gets closer on the sale of your home and you still have not purchased your next one. This is why some people are willing to pay so much in competition. They need to buy before they are homeless.

If you have to get out of your current house because it sold and you have not yet purchased a new one, just rent an inexpensive property until you do buy. I have heard this response but what I believe is being overlooked are the associated costs. Perhaps more importantly though, we are going to assume that you are single or a couple without children or other dependants. If you are a family the idea of renting for a short time, having to deal with schools, relocating your kids repeatedly, taking them away from their friends, etc, just makes it so much worse. So, besides family considerations, you will want to look at short term rental so you can get out of it when you do buy. You do not want to be locked into a lease for a full year. Short term rentals are more expensive AND tend to be harder to find. Short term rentals also tend to be furnished. This leads us into the second point commonly overlooked. Where are you going to put all your belongings while you are renting? Maybe it is just my way of thinking, but if I was going to rent for a short period of time while trying to find a house to buy, I would want the least expensive that I could find. Probably smaller than what I would be use to. All my “stuff” would not fit, especially if it was already furnished. So storage fees would be an additional cost. You are looking at several thousands of dollars per month in rent for both a place to live and storage of your belongings.

I have seen a guy driving around looking at homes in his RV because he already closed on the sale of his home. There are hundreds of stories just like his.

Let’s look at selling first.

The most common point I hear to selling first is how much do you know to spend on your new home, if you do not know how much you will get for your old home? Again, a very valid point. Even if you look at all the comparables in the neighborhood and have an idea of what it should sell for, it may not. It may sell for much less. If this was to happen, selling for less than what was expected, you will have options available to you. A good mortgage broker can help you get a loan to cover the difference though the interest would likely be higher. So just as with buying first, if things do not go as planned there are options. The bad news is you will end up paying more.

So what does it come down to? Should you buy or sell first? It depends on the market. For several years now but especially during 2020 and 2021 while the market was so hot that properties were selling like crazy and it was very difficult to buy, you should buy first. In a market where properties are sitting, not selling, or going for less than list price, you may want to consider selling first.

In either case, as a buyer or a seller, you may want to consider including a condition in the offer. If you are the buyer, then the offer is conditional on the sale of your property. If you are a seller, than the offer is conditional on the purchase of a new property. In a hot market where your offer needs to stand out though, any condition will weaken your offer.

So what would I recommend for you about whether you should buy or sell first? Give me a call and let’s meet for a coffee. We can sit down and discuss your property, the neighborhood you are looking to buy in and sell in, and the condition of the market at that moment. Then together we can make a decision on what is best for you…

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