To buy first or sell first, that is the question.
It is for today anyway. Why? Because it’s Wisdom Wednesday!!!
In our house, when it is a question of which came first, the chicken or the egg? Dawn insists it’s the chicken. And who am I to argue. (Insert happy wife comments here)
Regarding your house however, it is easier to apply some logic and as in the chicken/egg discussion there is an argument for both. Much of this will be dictated by the current market conditions and aligning yourself with a knowledgeable Realtor will help immensely.
The benefit of buying first in a hot market means you secure your landing pad for when you do sell your current home. If you have cash this is an easier decision because you can make a non-contingent offer. The risk of buying first could be that if you haven’t sold your current home, you get to make two house payments. If that isn’t a big concern you may still need the down payment money if you’re buying up. In which case, you can consider a bridge loan. Bridge loans allow you to use the equity in your current home for a down payment and defer the payback until you sell it thereby allowing you to purchase the new one. Beware though, as you will need a sizeable income stream to qualify and cover 3 payments including the new house, the old house and the payback.
Of course if you are a fist time buyer, these rules don’t apply. Find a G.R.E.A.T. Realtor, get prequalified and shop on!
If you have a house and you sell first, you are in a much better negotiating position. Similar to buying first as a cash buyer, you don’t have to make an offer contingent.
Possession is, as they say, nine-tenths of the law and you can negotiate a longer settlement period in order to find the home of your choice and your Realtor can help you add contingencies in the event you don’t. The risk is that if you do sell and run out of time, you may have to move twice. Renting until you find your dream home as it were.
What is your biggest fear? Selling first and not having a place to live or finding the new home first and having to make two mortgage payments.
The answer to this question really lies in your financial position, your tolerance for risk and your local market. Either way it is wise to have a plan B. Get with a G.R.E.A.T. Realtor and develop a strategy.
PS. I have time for you and want to be available to you and those you care about. Reach out if you want to grab some time to talk or just grab a cup of coffee