Good question and one I deal with on a regular basis. Should you sell your home before purchasing a new one and then risk not having one come closing date? Or do you purchase a new one before your current home sells and potentially have to carry two mortgages?
Should I purchase my new home before I sell my current one?
Ok, so here is the scenario, you find a great house and decide you want it to be your future home. You put in an offer to purchase and it gets accepted, there is a lot of activity on the property so you waive your conditions quickly and now you are committed to that sale. Two months down the road and your closing date is around the corner but your current home hasn’t sold, so in two days you will be the proud owner of 2 houses and be stuck with 2 mortgage payments.
Ok, that sounds awful so I should sell my home before I buy my new one?
Let’s look at this. Your home is cleaned and properly staged; your Real Estate Agent did their homework so the home is competitively priced. First week on the market you have 12 showings and have generated an offer, which you accept and a week later your house is sold. Congrats! Now you need to find a new home in the next month and a half before you no longer own yours. One of two things will happen here, either you don’t find one in time and have to move in with your in-laws until you do or possibly worse (probably not) you have to settle on a home that you are not crazy about but is the only thing close to what you need that is presently available.
Just tell me what to do!
Here is the reality, this happens all the time when buying or selling a home but it’s all in the planning that makes the difference. What I suggest to clients is this; list your current house but make it clear to Buyers that any offers coming in must be conditional on the Seller finding a new property. This way you do not miss out on a busy market and can entertain offers while you search for a new home. When you get an accepted offer it gives you the time to find a new one.
On the flip side you do not need to have an offer on your current home to find a new one. If you find a house that you love and want to submit an offer without having one on yours, have your Agent make that offer conditional on yours selling. This way you can tie up your new place temporarily while you sell the current one.
It is important to keep in mind that every situation is different. Your professional licensed Real Estate Agent will be able to provide you with valuable information and advice in this area to make sure you are not left without a home or stuck with too many.