We're Here Helping You Find Your Way Home (Pt 1)

What comes first?

What comes first - the buy or the sell?

The honest answer is: it depends.

What I'm going to do is I'm going to go into a couple of scenarios to help educate you and give you an idea of what makes the most sense, depending on your situation and what you’re doing.

Every situation is different, of course. In my experience, this is why you need a REALTOR®: to guide you and to help navigate what's best for you. There are so many different scenarios to consider - from baby boomers downsizing to young people moving up in the world…

You might want to move, but you’re like, “Well, where am I going to go?”

Buying first

It becomes very stressful to think about that daunting process and it's the uncertainty of not knowing what home you’re going to move into. Or it's having to deal with the stress of, “My home isn’t selling." Maybe you’re moving from a condo. Certain situations - like say you’re downsizing (this is a great downsizing market) - you can buy first. You could buy your bungalow, or you could buy your condo and you could know that, yes, you’re going to have to deal with competition and put in firm offers and if you haven’t bought a home in a long time, then you’re going to need direction from a REALTOR®.

But if you want the conservative approach, then you would sell first.

Selling first

In my experience, in most cases it’s always better to sell first. You’re going to know what your buying power is. You’re going to have an agreement of purchase and sale in hand that the bank is going to want in order for you to facilitate getting your mortgage and also bridging financing.

So it can help you understand what's possible for you.

Bridging financing

If you’re looking at a discrepancy with your buying date and your closing date and you’ve already sold your home, well then, the bank is going to give you a small loan during that period.

You could be paying hundreds of dollars or more to bridge anywhere from a couple of weeks to (hopefully it's not) a couple of months. And we want to line up the dates as much as possible. The other advantage would be that you’re going to know what your equity is. So, you’re going to have sold that home and if it’s selling in multiples and you’re concerned that maybe it’s not going to go up to eight hundred and all of a sudden you get $830 or $840, well then, you’re going to be a lot more aggressive when it comes to buying your home.

You’re going to know exactly where you stand with the banks. And you’re going to also see firsthand what competition looks like.

Now if you’re selling a condo, condos can take a little bit longer to sell. It might be more stressful. It’s about eliminating that major stress of, "Okay, you’ve bought a home, but your home isn't selling." Or you didn’t get out the equity that you thought you would and now you’re in that turmoil from a financial standpoint.

Creating confidence

If you’re an aggressive consumer and you want to maximize your equity, then you can buy a little bit lower and you can sell higher, and you know where you’re moving; those are great points for your case, right?

You’re going to know what you bought, and you can do that.

But let’s just say that you’ve now hit your head against the wall a few times and you’re discouraged. You say, “I’m no longer moving,” right? Because there’s that unknown. There’s that uncertainty with, "Well, what's my home going to sell for? What’s my equity? I don’t know what I can afford."

So, you could have gone through that experience a few times, and are feeling lost or discouraged and say, "I’m not moving anymore." And that's unfortunate.

To be successful in the buying and selling process, we need to know the positives and the negatives of both. I mean, I'd want to know where I was moving to. 100% I would want to know where I was moving to. If you can relate and you’re in a situation where you’re a little more conservative and there’s that uncertainty, then having that confidence in knowing your home sold and what you can afford as you go through the process is going to give you that vote of confidence.

I think that the reality is nobody wants to be in the situation where they’re renting. There's the fear that the markets could change…

...and that's where I'd like to help support you. Navigating this process can be tough and you want to feel like someone has your best interests in mind. To help, make sure to watch for part two this article, where I talk more about downsizing, the market, your buying power and tips to help you move forward.

Of course, if you'd like to talk about your specific situation, please feel free to contact me directly HERE. We can even plan an educational buyer’s day including a tour of your new community, should you have an idea where you want to go.

For more information about Buying vs. Selling first, check out our recent Rambling REALTORS® Podcast on the subject of Selling Before Buying.