Balancing act: Sell a home and buy one at the same time?
agent can pull off.
But all you really need to do is to manage this scenario is to plan and strategize.
Sell your home first?
The safest and most financially feasible route to take is to:
- Sell your property first
- Then, get your mortgage pre-approved and ready for your new home.
- THE UPSIDE: This is less risky for the simple reason that you know exactly how much money you have for your new home.
- THE DOWNSIDE: Of course, selling your home first means you’ll have to rent a place while you look for a new one. Add to that moving costs and the nightmare of packing and unpacking, and keeping track of the million details that come with moving into a new home.
Buy first, sell your home later?
On the other hand, there’s a second option:
- Buy a new home and move in before selling the old one
- THE UPSIDE: It’s more streamlined and certainly less stressful for those who can afford it because it eliminates having to look for temporary quarters, pay rent, and move twice.
- THE DOWNSIDE. To buy a home, you need funds to cover expenses, especially if you’re on a bridging finance. Paying off a loan for two properties while waiting for your home to sell is the leading cause of cash hemorrhage.
Another downside of this option is the pressure to get rid of your existing property quickly. Which makes you a vulnerable seller, settling for a “recoup” because you can’t afford to wait for “profit.”
To help you make the decision, you also have to consider the economic climate of your neighborhood. A slow market means it’s difficult for you to sell your property ASAP.