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What do you do first? Should you buy and then sell your home, or should you sell your home and then purchase? Despite getting an A in high school biology, I can’t really comment on whether or not the chicken came first or the egg. However, I can leverage my real estate expertise and offer advice on how to navigate this tricky situation.
I won’t make any generalizations because every situation is different, even my own advice changes on a case-by-case basis. In general, I suggest on selling first. I think this approach really helps to lay out the full picture with little to no ambiguity. We live in a very challenging market and by selling first, you know exactly what you have to spend on your purchase. If the sale of your existing home exceeds your expectations, then you have more money to play with for your upcoming purchase. In contrast, if you don’t do quite as well as you thought you would, then you know how much to adjust your budget.
Surely, there is a chance that you sell and then are unable to lock something down. I still feel you’re in a better situation, even if this happens because you have alternatives available to you. You can go into a short-term rental; you can put your stuff in storage and move once you’ve secured a new home. This seems like a lot of work but think about the alternative! As I previously suggested, if your home sells for far more and the property you thought you could never upgrade to is now within grasp - why shortchange yourself from this opportunity? If you were banking on your home to sell for a record that never gets achieved, then you’re stuck in a situation where you purchased your new home based on a hypothetical sales price. In this lose-lose scenario, you not only have spent more than you budgeted for, but also end up accepting less for your home than you hoped for.
I hope this sheds some new light on the matter and provides an alternative perspective. If you’re ever in doubt, be sure to contact your realtor and have them advise on your situation!
Photo: Shannon Willis