Buy First or Sell First?

Deciding whether to buy first or sell first – or attempt to do both simultaneously – can be challenging. It’s important to consider all potential scenarios and determine what you’re going to do if things happen in a certain order.

For example, what are you going to do if you get a stellar offer on your home weeks before you’re able to finalize the purchase of a new home? Do you have the funds to put a down payment on a new home if you find the perfect one before your current home sells?

Outlining a list of contingencies and options may be a good way to ensure you’re not caught flat footed when things align or move more quickly than you were expecting.

Decide Where to Start

Buying a new home and selling your current home at the same time involves separate but related steps – each of which is complicated. You’ll be dealing with at least one (possibly more) mortgage companies or brokers along with home buyers and sellers – all of whom will be working on their own timeline and with their own priorities.  

There are advantages and disadvantages for either selling first and buying second or buying first and selling second. However, there may be a clear right answer depending on your unique circumstances.

The Pros and Cons of Selling First

Selling first is likely the easiest option if your budget is going to be unavoidably tight. Selling your home gives you a clear, concrete budget for your new home purchase. You also won’t have to temporarily deal with two separate mortgage payments, which could quickly become pricy if you end up buying fast but can’t sell your current home for a fair price quickly.

Selling first also gives you more leverage as a home buyer as you have the funds to purchase the new home without delay. Home sellers understandably aren’t fans of waiting on buyers, especially when there are lots of other people who are interested in their property.

The two main cons of selling first have to do with housing and moving. A gap between when you sell and when you buy will leave you temporarily homeless – and without a place to store your things.

How inconvenient this will be depends on your resources and local connections. If you have family living near you, you could just stay with them temporarily. There are also short-term storage solutions at varying price points.

If you do end up waiting months before buying a new house, there are risks that the housing market or interest rates could change in the intervening span of time – but if you’re selling then buying in rapid succession, market fluctuations shouldn’t be a major issue.

The Pros and Cons of Buying First

Some of the advantages and disadvantages of buying first are obviously the inverse of the selling first pros and cons. Moving is an easy, one-time process if you buy a home first. You also don’t have to worry about finding temporary housing or storage.

The downside is you will likely have to take out a second mortgage for your new home and make a downpayment without the funds from the sale of your current home. That means you may also need to make two mortgage payments each month until your old home’s sale is finalized.

Some home buyers will try to make their offer to purchase a new home contingent on them selling their current home – but this will likely be a serious disincentive for other home sellers. They may prefer to choose another home buyer who is ready and more than happy to purchase right away.

Another often overlooked disadvantage is the added pressure to sell your current home at an accelerated pace. This can make some home sellers feel like they must move fast and accept the first serious offer, even if they might get better offers by waiting a little longer.

One of the benefits of working with 72SOLD is you get the best offers within eight days, which allows home sellers to make decisions more confidently with some level of assurance regarding timelines.

Best Way to Sell a Home and Buy a Home at the Same Time

An obvious benefit of the 72SOLD system is going into the process with clear expectations of when solid offers will come in on the home you’re selling. Since our strategy enables home sellers to get the best offers for their area in just eight days, there’s no need to worry about contingencies based on delays – you can plan ahead for a more seamless process on both ends.

To learn more about our home selling system visit 72sold.com.