Collingwood - Blue Mountain Real Estate

BUYERS


WHO IS YOUR AGENT WORKING FOR?
BUY OR SELL FIRST?
THE BUYING PROCESS
FIRST TIME BUYERS
INVEST NOW FOR RETIREMENT
20 CRITICAL THINGS TO CONSIDER
BUYERS DO'S AND DONT'S

marg scheben-edey, Broker Market Value Appraiser - Residential Direct Line 705.446.1762

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SHOULD WE BUY OR SELL FIRST?

This is a common dilemma and one of the most common questions I’m asked by existing home owners. There are no simple answers to this question as it depends on your own personal circumstances and comfort levels. The best way to consider your options is to weigh out the pro’s and con’s of each possible approach.

Sell First

Sell First - Pros

You know exactly how much money you have from the sale of your existing home and can comfortably choose your next home's price range and negotiate accordingly.
You are in a position to make offers that are not subject to the sale of another property and this tends to be attractive to Sellers. If a property pops up that is perfect or extremely well priced, you can potentially be the first in the door with a strong offer.
You have more negotiating power. When Sellers turn down or counter an offer that is conditional upon the sale of a home, they usually believe that the Buyer will come back with a more serious offer if and when the Buyers' home has finally sold. Sellers give much more consideration to unconditional offers since they usually realize the Buyer does have other options and may move on and pursue a different property if their final offer is rejected.

Sell First - Cons

If the right home is not on the market when you sell, and if nothing comes up before your closing date, you may have to find alternative accommodation until something appropriate comes along.

Buy First

Buy First - Pros

If you are only interested in moving to a very specific property, buying first ensures you do not miss out on that one opportunity.
If a unique or under-priced property comes on the market and you do not think it will last long, snapping up the deal ensures someone else does not buy it out from under you.

Buy First - Cons

If your current home does not sell quickly enough, you may end up having to finance both homes and carry the extra debt until you do sell. Don’t forget that also means insurance, taxes, utilities, maintenance and other household expenses.
You do not know what the final selling price of your current home will be. If your budget is tight, this could affect your financial decisions. While you can get appraisals and market evaluations of your current home's value, nothing is for sure until you actually get an offer.
This is an extremely risky option for anyone on a tight budget!

Conditional Offer

A third option involves making your offer to purchase conditional upon your ability to sell your current home within a specified time period. Conditional offers usually include a clause that allows the Seller to continue to market his or her property for sale while you try to sell your home. If the Seller receives another offer which they wish to accept, they can accept it and ask you either to remove your condition or to step aside. While conditional offers do not provide all of the advantages of the first two options, they do offer a reasonable compromise for those uncomfortable with the drawbacks associated with either selling or buying first.

Conditional Offer - Pros

You do not have to sell your current home until you have found and negotiated an acceptable price on your next home.

Conditional Offer - Cons

You have less negotiating power. Sellers sometimes turn down or counter an offer that is conditional upon the sale of a home. Often, Sellers give less serious consideration to conditional offers than they do to firm ones. You may end up having to pay a bit more for the house in order to get your conditional offer accepted and be first in line.
Another purchaser may make an offer and “bump” your offer before you have sold your current home, putting you back at square one.
You cannot withdraw your conditional offer until the time set out in the condition has passed. This could be frustrating if a better deal comes along and you wish to pursue it.

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