After owning a house for several years, the time has come to consider a change. Whatever your reasons for moving, you will soon have some life-altering decisions ahead of you. Whether to buy first or sell first is the age-old question. 

The answer is not cut and dry and can be different depending on the person and the scenario. A big part of the decision will come down to what’s happening in the market right now. 

However, your personal goals and ambitions should always be the primary deciding factors. In this post, we’ll talk about the implications of buying first or selling first so you can choose what’s right for you. 

How the Market Impacts Your Decisions

Sometimes, the market leans heavily enough in one direction to simplify your choice. In a hectic seller’s market, each listing sells in the blink of an eye because there are not enough houses to satisfy the insatiable demand from buyers.

In this scenario, you can almost be sure that your home will sell successfully, often within days of hitting the market and above your asking price. Buying will be much more challenging since you’ll soon find yourself competing with other buyers for the few available listings. 

In this case, many people decide to get the hard part out of the way and buy first. Once they’re sure they have a place to go, then they put their existing house up for sale.

Now let’s examine the opposite scenario. It’s a slow buyer’s market, with numerous houses for sale and very few people searching. Your house sits on the market for a long time, and you may have to make several concessions before finally finding a buyer. 

Selling your house can be a bit like pulling teeth under circumstances like these. Once it’s over, you can breathe a sigh of relief. Since finding a new house will be so much easier, selling first might be your best course of action.

Generally speaking, the advice is to buy first when the market is hot and sell first when things slow down. That said, there can be unusual circumstances to consider before selling or buying your next home even when the market seems simple and straightforward.

Are you facing any unusual challenges when selling your home? The posts below can help you rise above:

• Why Sellers Hesitate to List Their Homes for Sale
• What Resources Are Available When Selling a Family Member’s House?
• Can You Successfully Sell a House With a Stigma?

What Are the Risks of Each Option

Knowing the market and planning for success will help you minimize the risk involved with any transaction, whether you choose to sell or buy first. Of course, nothing is without its downsides or challenges, so let’s take a look at the implications of both.

Buying First

When buying first, the biggest risk is that it might take longer to sell your existing home than you planned. You also have no way of knowing precisely how much you will earn from your sale. Your house may go for well above your asking price, but no one can guarantee this will happen. If you decide to sell first, you should always be prepared for the possibility that you might have to carry two mortgages for the time being. 

You can minimize this risk in three ways:

1. Make sure your house is cleaned, updated and staged before you buy your next home. Buying first does not mean you have to be unprepared to sell quickly!
2. Set aside an emergency fund in case you do have to cover the costs of two properties for a time. Alternatively, you can arrange for bridge financing.
3. Work with an experienced real estate team who can showcase your home to a network of qualified buyers.

Depending on the market and your personal circumstances, the advantages of buying first can far outweigh any negatives. 

• With your new home already secured, you don’t have to rush or worry about not finding a place on time. 
• You can begin moving your belongings before your existing home closes. 
• If prices are rising in the meantime, you’ll grow your equity twice as fast for a short time.

Selling First

Selling first is almost always the safest option in most markets and for most homeowners. Even so, this path can have its disadvantages.

• Once your house sells, you’ll need to find a new home quickly. This added pressure can be stressful, especially if listings are limited.
• The moving process is also rushed as you need to be out of your existing home on your closing date.
• In the worst-case scenario, the market might change, and houses become more expensive once you start looking. 

In spite of these risks, there are several reasons many people decide to go this traditional route. In many cases, the peace of mind is well worth it. Selling first is particularly advantageous in a balanced or buyer’s market.

• Budgeting for your new home becomes much easier and more accurate since you will know exactly how much money you have in your pocket after your sale is finalized. 
• You’ll have a competitive edge over other buyers because you don’t have to include a condition of sale in your offer.
• You won’t have to worry about your house taking too long to sell or being on the hook for two mortgages. You’ll have the proceeds from your sale securely in the bank by the time you need to provide your deposit on your new home. 

Whether buying or selling, it pays to have a plan. The posts below will help you be ready for anything:

• What Is Bridge Financing and Do I Need It When Selling My House?
• A Home Seller’s Guide to Closing Costs
• Should You Use the Same Agent to Sell and Buy a House?

Hidden Factors to Consider

The decision to sell or buy first can also depend on the structure of your house itself and the neighbourhood you live in. For example, imagine you currently own a home with a very unique design. As spectacular as it may be, it can take longer to sell. 

On the other hand, some listings in highly desirable neighbourhoods go very quickly and at high dollar amounts. These niche markets can run counter to how the market is behaving overall.

An experienced real estate team will help you plan for the unexpected and make the most out of every hidden opportunity. With expert guidance, you can maximize the sale of your current home while negotiating the best possible price on your next. There’s no better way to streamline your transition to the next chapter in your life.

Do you have questions about when or how to sell your home in the current market? Our experienced real estate team can give you the information you need to move forward. Contact us today or call 905-332-9223 to connect with our offices.