Selling before buying

Professional Tips to Help You Make the Right Decision

Selling a home may be a challenging and stressful experience as we may have emotional attachments to the house. If one is in a situation to sell because of any reason, then the seller must assess the benefits and drawbacks of selling a home.

Selling in a buyer’s market makes the most sense before buying in a seller’s market. In this case, you know that your present property may take longer to sell, and you most likely do not want or cannot afford to tie up valuable resources in two residences for a period.

But if you are someone who sells a house in order to buy a new one, you can benefit if you sell the home before buying another one. Let us explain further why it is not a good idea to do both simultaneously.

If you sell before you buy, you’ll have the cash from the sale to put toward your new home. Plus, you won’t have to worry about getting approved for a mortgage on your new home while also trying to sell your old one.

Things tend to get mixed up when you try to do both selling and buying at the same time.

You may also be tired and hopeless if you fail to buy or sell simultaneously. So, it is advantageous to concentrate on one task at a time.

Moreover, when you decide to sell the house before buying, you should arrange a living place; as nobody wants to end up homeless.

You should know the risk associated with the sale, and know your next step if the house does not sell quickly enough, or for as much as you expected.

Meanwhile, you may be preplanned and ready for any situation.

Whether you have any worries or not regarding the new house, no matter what you do, your actions inevitably have pros and cons. You will have significant negotiating power if you sell before buying another one. Thus, you can wholly focus on the selling process and get the best deal.

Selling your home before buying another one is often an excellent way to ‘trade up.’ It can also be a great way to release some equity so you can put a larger deposit down on your next home, which could help you get a better mortgage deal.

Additionally, you remain in control of the sale of your own house. This allows you to set your price right and your own terms. Luckily, you’ll get rid of paying commission to a real estate agent. On top of all, you’ll get a clear idea of your budget when you sell a house before buying.

According to Zillow, selling in a buyer’s market makes the most sense to sell before buying. In this situation, you know that your current home may take longer to sell, and you probably don’t want to or can’t afford to tie up valuable resources in two homes for an extended time.

The downsides of selling a house before buying a new one

Selling your home before buying a new one is not always the best option unless you have friends or family you can stay with during the process. If your old house doesn’t sell as quickly as you thought it would, it can be stressful and time-consuming to coordinate the sale of your old home with purchasing a new one. You may carry two mortgages for a period, which can be expensive. If you’re not careful, you could end up without a place to live.

The process can be stressful if you try to do both the tasks of buying and selling simultaneously. Moreover, it may cause more stress as you need to find accommodation first. Likewise, if you search for a rented property and fail to find one, you could end up homeless. Even if you do so, keep in mind that rentals are not very cheap. When you want to rent in a good, desirable area, you must keep the cost in mind. Most of the time, the cost of rent can exceed your mortgage payment. This could lead to more expenses on rent than on mortgage payments. In short, selling your home before buying another one means you could end up being homeless for a while if you don’t find a suitable new home quickly.

There’s also the risk that your old home could sell for less than expected, leaving you with less money to put toward a new property.

Make sure to devise a proper plan and then think about whether to sell the house before buying or not. You should have your contingency plan if things do not go as planned.

Here are some reasons you may want to sell your home first before buying:

You may need the money from the sale

Most of the time, it is impossible for a person to sell and buy simultaneously; therefore, they sell their house before buying.

It is more practical to sell before buying, as you want money from the sale to buy your new home.

Don't want to have two loans to cover simultaneously

Sometimes, if you sell and buy simultaneously, you could end up with two home loans. This is also risky if one does not prepare for extra time and costs. However, it is always advisable to talk to a real estate agent before making any decisions.

So, to avoid all the burden and effort, it is better to sell first. Sometimes, it makes more sense to sell your current home first and use the proceeds to buy your new home.

They want to avoid having two mortgages

One of the most stressful things you can do is coordinate the sale of your old home with purchasing a new one. It is easy to get into trouble if you need to pay off two mortgages at once, or to rent while you wait for your old house to sell.

In other words, not being careful can lead you into a situation where you’re paying two mortgages at once or, even worse, being forced to live in a rental while you wait for your old house to sell.

Selling and buying can be too much to handle

It can be challenging to handle when you’re simultaneously buying and selling a home. You must coordinate timing with your real estate agent, keep track of paperwork, and juggle showings and open houses. You’re probably dealing with some emotional stress as you say goodbye to your old home and prepare to move into your new one.

When does selling first make sense?

Selling your house first makes sense in the following cases;

If you are considering selling first, finding out how much money you can save by doing so might help pay down the personal debt faster. Check with your accountant to see if selling your home first could give you any tax benefits.
If you plan to get out of debt first, you can also downsize and consolidate your possessions more quickly.
Selling your home first gives you the option to move into an apartment or smaller residence while saving the extra money to put toward a new home.
Selling first allows you to move forward with wide-eyed excitement into your perfect home, knowing what the portfolio is worth and winning you more negotiating power to pay a lower price for your dream home.
In a buyers' market, selling before buying makes the most sense if your house takes too long to sell. Likewise, you don't want to bear the expenses of two homes at a time.
Also, if you qualify for a home loan, you can use the existing bond on your current home as a deposit for the new house. That is known as "backed security"
Selling your home sooner can be beneficial. You won't have to worry about overpaying for a home, and you can put in a higher bid if the price is too high. You can also withdraw your offer if the negotiations stall.

Final remarks

Deciding to either sell your house before buying a new one, or to buy a new home before selling your old one can be difficult. Both options have pros and cons; ultimately, the decision comes down to what is best for your situation.

Ultimately, it is always your decision to either sell the house before buying or not. But everybody’s situation is different. By evaluating your own situation, you allow yourself to make a more practical decision. You can always plan to minimize stress and understand which is better for you.

Meanwhile, you need to set a realistic budget and understand your local market to make the process as smooth as possible. However, your finances, timeline, and market conditions influence the final decision.

So, before you sell the house before buying, you still need to know the market conditions and stay updated about your house’s market value. Many estate agents are out there. If you want the best possible service and price for your home, you need to work with a top agent. Expert estate agents have the experience and expertise to get you the best results.

Buying and selling a home can be stressful, especially if you do it on your own. Selling.House can assist you. As a result, you can get the best deal on your next home.

No matter what you decide whether to sell before buying or not, Selling.House can help you every step of the way. We are a team of experienced professionals that understand your needs well and provide the best possible advice. Call us today to discuss your move!