Should I buy my next home or sell my current home first? Transitioning from one home to the next can be a tricky process – especially if you’ve never sold a home before. How do you know if you should buy your next home before selling, or if you should sell your current home before buying?
Every situation is unique, and to determine the answer to that question, several factors must be taken into consideration. There are three questions to discuss when faced with such a decision: Is it possible and feasible for you to carry two mortgages? What kind of timelines/deadlines are you working with? What is the state of the current real estate market?
If the market is currently in favour of buyers, it’s better to get your existing home sold first prior to purchasing your next home. If you’re in a seller’s market then you’ll probably want to locate and purchase your next home before putting your current home up for sale. In an ideal world,
One of the first steps to take prior to making a decision would be to talk with your mortgage provider, and/or financial advisor. They may have solutions or be able to provide some insight to how you might make your situation work in your favour financially.
Of course, there are pros and cons to each and as mentioned before – every situation will be unique and in either, you must take into consideration all factors.
Not everyone is comfortable with carrying two mortgages. Talk with your mortgage provider and/or financial advisor to find out what options are available to you in terms of ‘bridging’, alternative financing, or carrying two mortgages. This can be a significantly stressful decision to make and can cause unrest and uncertainty for you and your family. As a buyer, you may be worried you won’t be able to find what you’re looking for once your house sells, and that you feel pressure to buy within the timeframe you’ve agreed upon with the buyer of your existing home.
At the same time, having to adjust the price of your existing home under the pressure of the approaching possession date of your new home isn’t pleasant either.
Being in a strong position financially is always the best approach, whatever that might look like for you. That might mean renting a temporary home in between.
One of the benefits of buying your next home first, is the eternal timeframe to properly search and find a home that will fit as many of your wants and needs as possible. Having the freedom to search at your own pace is less stressful, and more thorough but this isn’t always an option for everyone.
Although buying first has some advantages, this situation isn’t financially feasible for everyone. There’s always the possibility to add the sale of your existing home as a condition to the offer; but there could be competing offers without that condition that would be more desirable to any seller.
Again, consulting with your mortgage provider, and/or financial advisor to find out if you’re eligible for some type of interim financing that would enable you to make an offer without the condition mentioned above would allow for the purchase of your new home with the sale of your existing home to follow
No matter which path you decide to take, keep in mind that a market can turn at any point. Plan your budget based on the worst case scenario. There’s no guarantee on how quickly your home will sell in any market. Avoid making rash decisions under pressure, and make sure you’re informed about your mortgage options, the real estate market, and what you and your family need in order to fulfill your needs and keep stress to a minimum.
If you’re in need of a mortgage provider, click HERE to see a list of trusted professionals in the Saskatoon area.