Should You Buy or Sell First?
You have options. Use the following as a guide to explore what might be the best move for you and ask Nicole McKenzie to assist you making your decision. If you are a current home owner thinking about purchasing a new home, then you may wonder what your strategy should be?
Do you wait to find the perfect new home before you put your current home on the market? Do you sell first and then look around?
Nicole knows what is happening in the market today and how it affects your decision.
If You Decide to Sell First
There are several benefits to selling your current house before searching for your next home.
- You will know exactly how much money you will have to spend on your new home.
- You will save time by narrowing the selection of houses to view before you begin looking.
- You can negotiate effective by making a firm offer.
The flip side of this scenario is that if you don’t find the right property before the closing date of the house you’ve already sold, you may have to look for temporary housing until you do find what you’re looking for.
Before you decide to sell first, you should determine whether you have alternate, temporary options, in case you have to move from your house before you’ve found a new one.
If You Decide to Buy First:
Buying a new house without having sold your current home may occur if you are interested in a specific property before your home is sold (or even listed for sale). It may be a matter of timing—grabbing hold of the home before it’s too late. If buying first means you don’t miss out on the real estate opportunity of a lifetime, it may be the best move.
HOWEVER, if you buy another property and aren't able to sell your current home quickly enough:
- You could end up having to finance both homes until you do sell
- You may not get as much as your are asking (expecting) to get from the sale
- You could be forced to sell at a reduced price in order to align the closing dates of the two properties
What type of financial stress would this bring to your life and how would you deal with it? What effect would this have on your financial situation?
The Alternative Conditional Offer...
An additional option involves making your offer to purchase conditional upon the sale of your current property within a specified period.
Conditional offers usually...
Include a clause that allows for the Sellers to keep their property on the market and remain open to other offers while you try to sell your home. If the Sellers receive another attractive offer before you have sold your home, they may accept and ask you to either remove your condition and firm up your offer, or to back down from the offer.
A conditional offer forms an area of compromise for those who are afraid to sell or buy first—but does not hold the advantages of the other two options.
However, the drawbacks of the conditional offer are:
- Sellers tend to take them less seriously. They definitely give stronger consideration to firm offers. This leaves you with less negotiating power.
- Some Sellers will simply turn down or counter a conditional offer. Other Sellers will believe the Buyer will come back with a more serious offer when their home has sold.
- You may end up having to increase your offer in order to have your conditional offer accepted and keep your foot in the door of your desired house.
- Even if your conditional offer is accepted, there is no guarantee that another Buyer won’t step in and overthrow your offer before you have sold your current home, which would put you back at the starting line.
- Also you cannot withdraw your conditional offer until the end of the period specified in the contract—which means that if a better deal comes along, you will have to wait to jump at it.
What homeowners decide depends entirely on their own situation and what the market is doing at the time. Unfortunately, there is no right or wrong answer and either way, it can be a risk. Call Nicole McKenzie today to discuss your personal situation and options.