Buy first vs. sell first: what homeowners should know

If you’re ready to move into a bigger home, you may be wondering whether you should sell or buy first. While there’s no one right answer, here’s what you should know about each option.

Buy first
The main advantage to buying first is that you’ll have plenty of time to peruse the market for your new abode. Without a closing date on your current home pressuring you, you’ll be free to hunt for the perfect property. You’ll also be less concerned if you face setbacks.

However, buying first has one potential downfall: if you can’t sell your previous home right away, you might end up owning two properties at once. This will put you on the hook for double the number of mortgage, insurance and utility payments.

Though you can protect yourself from this scenario by making your offer conditional to the sale of your house, it might make your bid less attractive to sellers. In a competitive market, you’ll be at a distinct disadvantage.

Sell first
The main benefit of selling first is that you’ll know exactly how much money you’ll have to buy your new house. The downside, however, is that as soon as your home is sold, you’re on the clock. And if you can’t find something suitable before the closing date, you may end up having to invest in some type of temporary accommodation.

The best approach
Understanding the market conditions where you will buy and sell the involved properties is key. The best thing to do is consult a registered real estate agent who’s familiar with the associated areas. They’ll give you advice about how proceed and help you meet your goals.