Putting all the pieces together can be tricky!
Buying a new home while selling your current one is a delicate balancing act. For many homeowners, the question arises: Should you sell first, then buy, or buy first, then sell? The right approach depends on financial ability, market conditions, and personal circumstances. Below, we explore the key considerations, pros, and cons for each path.
Option 1: Sell First, Then Buy
We need the money from the sale of our current place for the down payment on the new place
( Note: If you have other investments you may be able to make yourself a bridge loan and go with Option 2 )
It is common to need the proceeds from the sale of a property in order to have the desired down payment and cash reserves for the new place. In this situation, we will need to make the new purchase contingent on the sale of the existing property. The good news is that those closings can happen on the same day but will need to be separated by a few hours to allow time for the wire transfer from one attorney to the other (if the closings are at different firms).
Key Considerations:
- Market Conditions: If it’s a seller’s market, selling first ensures you maximize your return. However, finding your new home quickly may be a challenge. Conversely, if it is a slower market, you can measure the market response to your home once it is listed and get a real-time read on where it will sell.
- Temporary Housing: It is difficult to make the timing on both sales so that there is no gap. If we aren’t able to secure your new home with terms that allow for a back-to-back closing, you may need to arrange for short-term housing or negotiate a leaseback from your buyer.
- Financing & Pre-Approval: First order of business is to get pre-approved for the new place so you know exactly where you are on the numbers. This puts you in position to structure the most favorable terms and act quickly when the right home becomes available.
- Contingency Strategy: Offers under this scenario will have to be contingent on your home sale, and this can be less attractive in a competitive market. If you have an interim housing option; selling now may be a workable trade-off so that you can go ahead and close on your sale and be able to make non-contingent offers on your new place.
- Logistics of Moving Twice: If there’s a gap between selling and buying, plan for storage and additional moving costs.
Our Process:
- Get You Pre-Approved for Your New Loan: Getting pre-approved for your new loan up front puts you in control so there are no surprises regarding what you can do. It sets our budget for searching, it helps you run all kinds of scenarios so you understand the numbers, it demonstrates to any seller that you have you act together and are an attractive buyer for them.
- Set Up Your Searches: We create a customized searches for both your current place and for the next property. The first search acts as a weather “radar” for all relevant activity affecting your pricing. The second search helps us zero in on neighborhoods where your new place is likely to be found. Both of these searches will give a feel for the pace of activity in these specific market niches. They monitor new listings, price reductions, pending sales and final sale prices.
- Interior and Exterior Staging Consultations: If you are living in your home, our Stager’s goal is to take what you have and use it to put your best foot forward for photos and showings. We also do a walk around on the exterior to generate a list of suggestions for you to have curb appeal that sparkles.
- Prepare the Property for Photos: We assist with identifying any contractors for needed work/repairs.
- Get Lifestyle Photography: Our photographers are fantastic at managing angles, lighting and colors! Our goal is to highlight the best features and unique strengths of your property to create a compelling online slideshow.
- Ready, Set, Go: Our overarching goal is to help you prepare for the best outcome and layout a reasonable schedule to achieve your goals. That will equip you to make your best decisions!
- Preview New Home Options: With the searches running, we go out and preview homes as they become available in order to “calibrate” your understanding of what your money can buy in the places you want to be. The goal is to maintain a short list of options so you are ready to act when your current home goes Under Contract.
- Lock Down Your Next Home: The goal here is to work out the timing so that you are only fully committed to the contract on your new place after your Buyer’s Due Diligence Period has been successfully resolved AND your closing dates fall on the same day.
- Land the Planes: Our goal is to hold everything together, meet the contract deadlines, get everything set up and enjoy two smooth closings so you can finish the moves you want to make.
Pros:
✅ You will have managed this process as well as anyone could.
✅ You will have realistic budget numbers to evaluate options.
✅ The sale contingency will help you avoid the financial stress of carrying two mortgages.
✅ You will avoid feeling pressured to sell quickly at a price below what you are comfortable with.
✅ You will be able to read and respond to the market without being committed to a specific outcome.
Cons:
❌ You may need temporary housing, which could add some inconvenience and cost.
❌ You will be at a disadvantage if competing with cash and non-contingent offers.
❌ A seller may not want to take their house off the market for an offer with a sale contingency.
Option 2: Buy First, Then Sell
We could buy the new place before we sell our current place.
It is a wonderful luxury to be able to purchase you next place before you sell your current place. Being able to do this has so many benefits! You will not:
Key Considerations:
- Financial Readiness: Ensure you have the funds and financing in place to buy before selling.
- Market Conditions: If homes are selling slowly, you may carry two mortgages longer than expected.
- Bridge Loan or HELOC: If needed, explore short-term financing solutions to access equity from your current home or other investments.
- Carrying Costs: Budget for mortgage payments, utilities, insurance, and taxes on two properties.
- Selling Strategy: Decide whether to list before or after moving. A vacant home may show better, but a well-staged home can feel more inviting.
Our Process:
- Get You Pre-Approved for Your New Loan: Getting pre-approved for your new loan up front puts you in control so there are no surprises regarding what you can do. It sets our budget for searching, it helps you run all kinds of scenarios so you understand the numbers, it demonstrates to any seller that you have you act together and are an attractive buyer for them.
- Set Up Your Searches: We create a customized searches for both your current place and for the next property. The first search acts as a weather “radar” for all relevant activity affecting your pricing. The second search helps us zero in on neighborhoods where your new place is likely to be found. Both of these searches will give a feel for the pace of activity in these specific market niches. They monitor new listings, price reductions, pending sales and final sale prices.
- Interior and Exterior Staging Consultations: If you are living in your home, our Stager’s goal is to take what you have and use it to put your best foot forward for photos and showings. We also do a walk around on the exterior to generate a list of suggestions for you to have curb appeal that sparkles.
- Prepare the Property for Photos: We assist with identifying any contractors for needed work/repairs.
- Get Lifestyle Photography: Our photographers are fantastic at managing angles, lighting and colors! Our goal is to highlight the best features and unique strengths of your property to create a compelling online slideshow.
- Ready, Set, Hold? : Our overarching goal is to help you prepare for the best outcome and layout a reasonable schedule to achieve your goals. One option is to go ahead and push through the preparation process on your current home so everything is done and you can list quickly once you find your new place. The other option is to wait until after you move and make those decisions based on the condition of the property when it is empty. We can do it either way.
- Preview New Home Options: With the searches running, we go out and preview homes as they become available.
- Lock Down Your Next Home: Once you find a property you like, the negotiations can begin.
- Close on Your New Home: Once you are Under Contract, our goal is to meet the contract deadlines, navigate the inspections, get past the appraisal and close on your new home. Then, we double back and start/restart the Selling Process.
- Ready, Set, Go: Full-steam ahead with preparation and listing you current home now that you have moved into your new place.
Pros:
✅ Less stress in finding the right home before selling.
✅ No need for temporary housing or rushed decisions.
✅ You can do work on the new place before you move in and do work on the current place after you move out.
✅ Your current home can be staged and shown without disrupting daily life.
✅ Your offers can be non-contingent and your timeframes for inspections, appraisal and financing can be very short (Sellers love this!)
Cons:
❌ Risk of financial strain if the current home doesn’t sell in a timely manner.
❌ Renting staged furniture is expensive.
❌ You will need to check on a property that is vacant – especially in cold weather months.
Which Approach Is Right for You?
There is no one-size-fits-all answer. Selling first provides financial security but may require temporary housing, while buying first allows for a smoother transition but carries financial risks. The best strategy depends on your specific financial situation, risk tolerance, and local market conditions.
As experienced real estate advisors, we can help you evaluate your options, develop a personalized strategy, and guide you through the process for a seamless transition. Whether you decide to sell first or buy first, having a trusted expert by your side makes all the difference.
Thinking of making a move? Let’s talk about your options and create a plan that works best for you!