Is it better to buy a new home or sell your existing home first? Both options have their advantages and their risks. By carefully examining the pros and cons, and by providing alternatives in case of setbacks, you will be able to make an informed decision.
Selling First
By selling your current home before buying a new one, you will know the exact amount you’ll be receiving from the sale. You will therefore have a very good idea of how much money is available for you to buy your new home.
You might start feeling the urgent need to find a new home right away, but keep in mind that you’ll already have all the information needed to make your promise to purchase. For example, you will know when the buyers of your current home are moving in, and can therefore easily establish when you will need to take possession of your new home. If ever the dates don’t coincide, you can always plan for temporary accommodation.
Buying First
When you buy first, you will know your new address, the exact price of your new home, the date on which you will become the owner and the transaction date. You’ll be able to consider these things when you receive a promise to purchase for your current home.
You can also make a promise to purchase that is conditional to the sale of your home. In this case, the owner of the property you’re interested in might receive another offer without any conditions. In order to give yours priority, the owner will ask you to withdraw your condition. You will therefore have to decide whether you’d rather buy that property before selling your existing home, or withdraw your offer.
One way or another, it’s a good idea to plan a temporary source of financing, in case your current home is not sold when you sign the purchase contract for your new home.
