You’re probably thinking about moving to another house. The idea is exciting, but since you haven’t moved before, one question keeps bothering you.
It’s more like the “chicken and egg” situation:
Do you sell your house first, then buy another? Or buy a new house and move, then put your old one on the market?
There’s no one right answer to this. So, let’s look at some factors to help you make an informed decision.
Look At The Market Condition
The real estate market is constantly changing, and you’ll need to pay attention to the trends to time your sale right.
If you sell when the market is hot, you’ll be able to get more money for your home. But, if you wait too long, the market could cool off, and you won’t get as much for your home.
You should learn the difference between a seller’s and buyer’s market to understand the concept better.
Consider Your Finances
Your financial condition will have a significant impact on your selling decision.
If you have saved up for the first deposit or down payment, you might not need to sell first.
But if you don’t have enough cash, it might be better to sell your current home first and then use that money as a down payment for your new one.
Know Your Timeline
Are you in a hurry to move? Or can you afford to take your time?
You might need to sell your house quickly when you need to relocate. This could be because of a job or getting married in a different location.
But, if you’re not in a rush, you might want to buy first and then put the first one for sale.
Now that you know the things to consider when timing your house sale, let’s look at some pros and cons of the decision.
Pros Of Selling First
Strong Purchase Power
When you go out to buy a home before selling yours, you’re at the mercy of the seller. If they receive a better offer or change their mind about selling, you’re left scrambling to find a new place to live.
But, if you sell your home first, you can use that money as a down payment for your new home. This gives you more negotiating power and helps you purchase a home that better meets your needs.
No Complex Calculations
Buying a home before selling your old one can be tricky. You’ll need to estimate the value of your current home, the amount you’ll need for a down payment, and closing costs on your new home.
This can be difficult when you don’t know how much you can spare for the upcoming down payment, initial instalment, and broker’s fee.
When you have sold your house first, you have a clear idea of your spending capacity and can easily manage your purchase budget.
Imagine you’ve bought a house before selling your first one. You might be mentally at peace to own your new house, but new stress would soon emerge.
As long as you own the first one, you must keep paying the mortgage instalments, utility bills, and recurring house-running costs. This can take a toll on your pocket!
Alternatively, by selling your first home, you won’t need to worry about financing two homes simultaneously. Plus, you can use the proceeds to make a larger down payment for the new house. This will reduce your monthly mortgage payments and further relieve your financial stress.
Another way to reduce your monthly mortgage payments is home loan refinancing. You can learn more about it here.
Be The Stager
When you sell your home first, you are still present at the property 24/7 and have the opportunity to stage it yourself to appeal to buyers. This can help you get a higher sales price and make selling your home easier.
Cons Of Selling First
In A Rush
When you sell your home first, you’ll be under pressure to find a new one quickly. This can make home-buying more stressful, especially if you’re relocating to a new city or town.
You Might Need To Move Twice
Unless you have a place to stay lined up, you may need to find temporary housing after selling your home. This could mean renting an apartment or moving in with family or friends.
So, that’s a wrap! Now you know when you should sell your first home and what to expect in either case.
Pro Tip: If you want to sell your house first, some renovation and a few smart upgrades can help you sell fast!