Though there has been some debate on whether it’s smarter to buy first then sell, or sell then buy, writers at Inman News believe that it’s smarter to sell first.
Consider Your Budget – Be Realistic on Market
Before you begin searching for your next home, it’s important to consider your budget. And it is never a good idea to assume that you’re going to make a certain amount off of selling your home; especially in this market, housing prices aren’t guaranteed. So, deciding to not sell yet, in hopes of the housing market improving, is a risky move.
Price It For The Market, Not Your Goals
Additionally, according to Inman News, you shouldn’t base the sale price of your home on what you need to make to buy the home you want; “you could end up listing at a price that’s too high for the market. After months on the market with no offers, you’ll have to drop your price to attract buyers’ attention. You could end up selling for less than what your home would have sold for if it had been priced right for the market to begin with”.
Another risk you will face if you decide to buy, then try to sell, is that you might have to cover the costs of owning two homes if your current home doesn’t sell. This could leave you over your head in debt, depending on how long it takes your home to sell, and what it sells for.
Worst of All…
If you think that you can afford to risk paying for two homes, you still need to check with your lender to make sure that you can be approved for the second buy.
Some sellers may be wary about selling their home to you if your current home isn’t yet sold. This is because the seller wants to know that you are emotionally and financially ready to move to a new home before they waste their time negotiating and meeting with you.
So, in order to make sure that you’ll have enough money to purchase your next home, it’s a good idea to sell your current home first or consider other options. Ask your real estate agent what your options could be after you explain your goals to them.
If you are worried about having to find somewhere to stay between the sale of your home and the purchase of your next home, you have a few options. According to Inman News, “you may be able to rent back your current home for a time after closing in order to minimize the possibility of making an interim move”.