Buying Before Selling Your House or After: Which is Better?

Posted by Kent Braaten on Tuesday, February 4th, 2020 at 12:00pm.


Often one of the greatest motivations for selling your house is buying a new one. And with the eager anticipation of a new home building up, it never surprises me when working with new sellers to hear the question, “Should I buy before selling my house or wait to buy until after it has sold?” The honest answer, though, is that there really isn’t a “right” answer! In fact, there are benefits and downsides to both approaches.

The Benefits of Buying Before Selling Your House

As I said before, it’s often the anticipation of starting fresh with a new house that will have sellers questioning whether to buy before selling their house. And as long as you can swing it financially, there can be many upsides to making the move in that order! 

One of the best things about buying a new house before selling your old one is that you won’t have to deal with the stress of trying to find a new home on a time crunch when your home does sell. With a new property all lined up or even moved into, you can just feel free to let go of the old and make room for the new in your life. And if you do move into the new home before selling, you may actually end up making the sale process a lot smoother. With no schedule of when you will be there or not, local real estate agents will have an easier time getting potential buyers in to view the space at their convenience!

The Downside to Buying Before Selling Your House

As nice as it may sound, buying before selling your house does have some definite drawbacks—primarily financial. If you don’t have enough saved up for a second mortgage or enough equity in your current house to remortgage it, you may not actually be able to buy a new home before selling your current house. This means that if you do decide to look, any offers you may make will need to be made contingent upon the sale of your current home. And if, despite your realtor’s hard work, your home is taking a longer time to sell, this could leave room for a non-contingent offer to swoop in. 

If you do have enough for a second mortgage or can remortgage your current home, you may be able to actually afford buying before selling your house. But you need to be willing and able to possibly carry the financial burden of two mortgage payments for a while if your home takes some time to sell. 

The Benefits to Selling Your House Before Buying

Quite simply put, selling your house before buying a new one makes the most financial sense. You won’t need to worry about carrying two mortgages and when it does come time to buy, the need for a quicker possession time and lack of contingencies can give you some negotiating power with sellers. But, of course, even with the financial stresses abated, there are still some drawbacks to selling your house before buying. 

The Downside to Buying Before Selling Your House

If your house is sold by the time you hit the market to start looking at buying, the chances are pretty good that you’ll be working with a possession day in mind and a strict time frame to adhere to. And this need for a quick possession may limit your search to move-in ready homes or sellers that have already lined things up for themselves. Alternatively, you could negotiate with the buyer for a longer possession window or consider a short term rental between possession dates. 

When it comes to buying your new home when selling your current one, the question of whether to do it before or after may not come with as cut-and-dry of an answer as we would like. But, it all comes down to your priorities! If you’re willing to take on the potential financial stress, buying before selling your house could save you from a rushed search or multiple moves! If you’re willing to work with a limited time frame or an interim home, though, you can save yourself the financial burden and sell before buying a new house! And if you’re not sure which would be best for you, your REALTOR® would be more than happy to guide you in the right direction that fits best for you, your family, and your lifestyle.

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