One of the biggest decisions homeowners face is trying to decide whether to sell their current home or buy a new one first. Well, there are actually pros and cons for both scenarios. This list should help you make your decision.
1. Money for Down Payment – Most buyers need the money from their current home’s sale to put a down payment on a new one. You could create a contingent bid that your purchase is pending sale of your home, but if there are other interested parties the seller is likely going to go with the person with no contingencies. Plus, if you haven’t sold your home, you won’t really know how much money you will have to put down. You can guess, but the market is far from predictable.
2. No Juggling Two Mortgages – If you sell first then you don’t have to worry about paying two mortgages longer than expected.
3. Increased Flexibility – You will enjoy more bargaining power if you sell first. Since you won’t be making two mortgage payments, you won’t feel pressured to take a low bid just so you can get out of your double payment.
1. You Will Have Somewhere to Go – If you sell first, you may worry about where you will live until you find a new place before you have to be out of your current one. It is nice to know you have somewhere to go.
2. No Rush – There is nothing worse than settling for a home you don’t love just because you are out of time. This is a big purchase. You should be buying a home that satisfies your needs when it comes to features and location.
3. Bridge Loan – If you are worried about not having a down payment for your new home until you sell your current one, you may want to consider applying for a bridge loan. You should not have a problem getting approved providing you have good credit and equity in your home.
4. Avoid Moving Twice – Quite often, if you sell first, you have to move everything to storage and live in temporary housing until you find and close on your new home. This is mentally and physically draining. Buying first means you only have to move once.
5. Contingent Sale Option – As mentioned earlier, contingent sales are not all that attractive to sellers. If you buy first, you won’t be put in the position where you need to make an offer contingent on selling your home. If there is another interested party, you could lose your dream house.
6. No Missed Opportunity – Finding your perfect home can be a process, especially if you have a lot of specifications. So, when you find it, you don’t want it to slip through your fingers. If you delay there’s a good chance someone else will snatch it up.
Only you can decide which scenario is right for you. Weigh the pros and cons of each side, and consider your budget and timeline when making your decision.