Should you buy a new home before selling yours?
- December 6, 2022
- 6:24 am
Moving houses can especially be difficult for those juggling the sale of their current home while trying to time the purchase of a new home.
If you list your home too soon, you risk having to find a temporary place and if you wait too long, then you could have to deal with paying two mortgages.
What to do before making an offer?
With the sale of any home, the offer price could be below, above or at the asking price. Ensure you are aware of this when making another offer as your home might not sell for the price you listed it or the sale could take longer than expected.
Making an offer on another home that’s contingent on the sale of your current home can be difficult. Most sellers favor an offer that has no contingencies as there's a higher chance of it going through on time. It's important to keep this in mind when deciding which plan of action to take.
Should I sell my house before buying?
There is no answer whether this is the right or wrong decision. It depends on your circumstances.
Pros of selling before buying:
It gives you time to prepare for your future home purchase with less stress over the sale of your current home. It also gives you a better idea of the time you have to prepare yourself for relocating.
In the case of mortgages, it can be beneficial or even your only option to sell. Sometimes, lenders refuse to let you borrow funds for purchasing a home until your old one is sold. In this case, the best solution would be to sell your home first or to add a contingency clause to your contract that states that the purchase of your new home is based on the sale of your current residence.
If your bank allows you to hold two assets simultaneously, ensure that you can afford it.
Cons of buying a house before selling:
Buying first can result in tremendous financial pressure as you pay for two homes.
Secondly, it could cause immense stress due to the uncertainty of when your property will eventually sell and when the double payments will stop.
Some lenders may require a contingency clause in your offer on your new home that could hinder that closing until your current residence sells or affect the competitiveness of your offer as most sellers won’t want their sale to depend on the sale of your current home.
Sourced by: Simpleshowing