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.
- 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.
- 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.
- 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.
- 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!