It’s that age-old dilemma, applied to one of the largest financial transactions you may ever make: Which step should come first? On the one hand, you may not be able to put an offer on a new property without the capital from selling your current residence. But on the other, you don’t want to sell your home without anywhere to move into next.
What should you do?
There are pluses and minuses to both options that should be assessed in relation to your needs and timeline. But it’s also important to see where the market is in your current and future neighborhoods. Consider your options:
If You Buy First
When you find your dream home, you just know—right? So why let it slip away from you just because your current home hasn’t yet sold?
Assuming you’re not working with an outside timeline, like an impending job change, buying first gives you plenty of time to shop for the right home for your needs. It also gives you plenty of time to pack and move, which in turn gives you more time to prepare your first home for sale. This is definitely the least burdensome way to go, at least in terms of coordinating your move.
Buying first works best in one of two situations:
- It’s a hot market and you have the cash to buy the exact home you want now before someone else takes it.
- The market is really quiet and you know you can get a great deal for your dream home because the sellers are anxious to move the property.
But don’t count your chickens before they hatch. The downside to buying first, especially in a slow market, is that you’re not guaranteed to sell your own home right away. You could end up just like that anxious seller you bought from: ready to accept a lowball offer just to get out of paying two mortgages. To get around this, you could make your offer contingent on selling your current home, but in an active real estate market, that puts your offer at the back of the list.
If You Sell First
Most real estate agents suggest you sell first, if at all possible. Selling your home before you make an offer on the next one makes you king of the coop:
- Getting your next mortgage is definitely easier because you’re not shouldering as much of a financial burden.
- You have more leverage with buyers when don’t feel pressured to accept the first offer that comes to you just because you’re anxious about having to sink money into two mortgages for an indefinite amount of time.
- And you have an exact budget to work with when you are ready to buy because your old home has already closed.
On the other hand, if you have lots of large furniture, a big family, or pets, selling first without a new home to move into can put you in a tight spot. You may need to rent an interim location, which can mean two moves: first out of the old house, then into the new home some weeks or months later.
Consider the Market
One of the biggest factors in making your decision should be the state of the real estate market, both in the neighborhood you’re leaving and the one to which you hope to move. According to the latest Beverly-Hanks Market Report, homes across Western North Carolina are flying off the shelf!
The current market is perfect for homeowners selling affordable homes and moving up to the next price tier. There is currently a shortage of properties available for first-time homebuyers in nearly every area of our region (giving advantage to you as the seller). In addition, homes in the mid range are sitting longer on the market (giving you advantage, again, as the buyer).
In markets at this particular sweet spot, it’s very likely that you can time the sale of your current home with the purchase of your new one…or get pretty darn close. All you need is a good plan and a professional by your side.
So…What Should You Do?
First, assess your personal needs. If you have kids starting school, pets that would need boarded, a new job waiting for you, or other major considerations, that will certainly affect your timeline. Decide where you can be flexible and where you cannot.
Next, get in touch with your Beverly-Hanks REALTORⓇ. With the aid of the Beverly-Hanks Seller’s Workbook, he or she will work with you to create a specific action plan based on how quickly homes in your neighborhood are selling versus your next neighborhood, as well as helping you prepare your home before it hits the market.
Your agent can help you start pecking away at new home listings before you put your current house on the market—knowing how many suitable options are available can keep you from getting stranded. And once your current home does hit the market, he or she can also help you negotiate a longer closing period or other contingencies if you think 60 days is just not enough.
The Beverly-Hanks mortgage department will also be able to guide you on your financial options. Perhaps you qualify for a bridge loan, a short-term loan that uses your current home’s equity to help you pay for your new home. Bridge loans are designed to help you buy first, then repay them once your old home sells.
Lastly, have a backup plan ready—just in case. As you know, it’s pretty easy for a closing to become delayed for myriad reasons.
Start Working in Your Beverly-Hanks Seller’s Workbook Today
All real estate is local. Your first-hand knowledge of your home and neighborhood are essential components to our approach. The Beverly-Hanks Seller’s Workbook takes you through the entire home selling process, step by step. Through thoughtful exercises, it collects information, clarifies your expectations, and coordinates the efforts of you and your agent.
REQUEST OUR SELLER’S WORKBOOK FROM YOUR AGENT OR DOWNLOAD A COPY NOW:
What’s Your Plan
What do you think? Are you more comfortable with the idea of buying first and knowing what awaits you? Or would you prefer to sell first and know your budget?
All real estate is local. In order to make confident real estate decisions, we believe it is important for you to have timely and neighborhood-specific information. If you would like more information about how to time your next move, our experts at Beverly-Hanks are here to help. Contact us today to speak with a Beverly-Hanks real estate agent about buying homes and land in Western North Carolina.