One of the most common questions we get when searching for homes is “do I need to sell my current home before buying a new one?” Theirs is no rule against purchasing a new home before selling your current one, but if you’ll be taking out a new mortgage, your first step should be making sure you qualify. If you have enough cash on hand to purchase a new home before selling your old one, then that’s great! However, for most the cost of owning two homes at once or moving twice can be expensive and hard to maintain.
Why should I sell my house first?
Selling your house before buying a new one is the practical scenario for most individuals, but it isn’t always the most convenient. Here are a few reasons that selling your home first may be best for you:
1. Avoiding a rushed home purchase
Selling your home first gives you more time. You don’t have to worry about taking the first offer that rolls in and can sell your home without pressure.
2. Making a strong offer
With the market currently leaning towards a sellers’ market, making a contingent offer is far less competitive.
3. Knowing your profit
When you sell your home first, you can have a set-in stone value that you will profit. This will give you a better understanding of your affordability and shop within your budget.
4. Avoiding two mortgages
Perhaps the biggest plus to selling firs; only one mortgage payment!
Why should I not sell my home first?
Although selling your current home before purchasing a new one may be the easier situation financially, there are some drawbacks! Keeping your home clean while living there can be difficult and overwhelming (especially if you have children or pets). Here are a few reasons that you may not want to sell first:
Rushing my home purchase
Whether you plan to buy before your home closes or during your stay in a rental, it can lead you to feel pressured/rushed on your next purchase.
Avoiding the cost of temporary housing
Rental costs can get expensive!
Avoiding moving twice
Having to move twice is a huge inconvenience to most. You can also rack up the costs of renting a storage unit and paying movers twice.
Can I buy and sell on the same day?
Many wonder if it is possible to buy their new home and sell their current one on the same day. Yes, you can, but it doesn’t always work out that way. The buying and selling process can quickly become complicated and has a lot of moving pieces. Just one hiccup can set your closing day back days or even weeks. With that being said, there have been many instances that my clients have closed both homes on the same day!
The bottom line So do you need to sell before buying? The short answer is “it depends”. It is possible to buy a new house before selling your old one, but it can be tricky if you don’t have the cash to make a non-contingent offer on your own.