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, then the seller must assess the benefits and drawbacks that come with selling a home.
Selling in a buyer’s market makes the most sense in contrast to 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 sell a house to buy a new one, you can benefit if you sell the home before buying another one. Let us explain further why doing both simultaneously is not a good idea.
If you sell before you buy, you’ll have the cash 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, simultaneously.
You may also be tired and hopeless if you fail to buy or sell, concurrently. Thus, 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, allowing you to wholly focus on the selling process and get the best deal.
Selling your house before buying another one is often an excellent way to ‘trade up.’ It can also be a great way to release some equity to put a larger deposit down on your next home, which could help you get a better mortgage.
Additionally, you remain in control of the sale of your own house. This allows you to set your price right and your terms. Luckily, you’ll get rid of paying a real estate agent commission. 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 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 careless, you could end up without a place to live.
The process can be stressful if you try to do both buying and selling tasks simultaneously. Moreover, it may cause more stress as you need to find accommodation, first. Likewise, if you search for a rental property and fail to find one, you could end up homeless.
Even if you do so, remember that rentals are not very cheap. When you want to rent in a good, desirable area, remember the cost; 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.
You don't want to have two loans to cover simultaneously
Sometimes, you could have two home loans if you sell and buy simultaneously. This is risky if one does not prepare for extra time and costs. However, talking to a real estate agent before making any decisions is always advisable.
So, it is better to sell first to avoid all the burden and effort. Sometimes, it makes more sense to sell your current home first and use the proceeds to buy your new home.
You want to avoid having two mortgages
One of the most stressful things you can do is coordinate the sale of your old home with the purchasing of a new one. It is easy to get into trouble if you need to pay off two mortgages at once, or rent while you wait for your old house to sell.
In other words, being careless 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 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 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:
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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; this 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.
Conclusion
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, but ultimately, the decision comes down to what is best for your situation.
Ultimately, it is always your decision to sell the house before buying. Everybody’s situation is different, and by evaluating your 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. However, our experts at Selling.House can assist you. And, as a result, you can get the best deal on your next home.
No matter what, you decide whether to sell before or after buying, and Selling.House can help you every step of the way. We are a team of experienced professionals that understand your needs well and provide you with the best possible advice. Call us today to discuss your move!
