A popular question we hear from sellers is, “Should I really sell my home first before I buy the next one?” Of course, the fear behind that question is a fear of being homeless, even if just for a short time. They don’t want to sell their current home without having another one to move into, which is a legitimate concern—after all, the market is moving quickly right now and homes are being swallowed up almost as soon as they’re being listed.
Despite that, we still advise our sellers to sell first and then buy, and there are three strong reasons for that:
1. Contingency offers must be disclosed. In this competitive market, we have to alert sellers to the fact that your offer is contingent on the sale of your own home by writing it into the contract. So, if the seller of the home you’re interested in is looking at three or four offers already and our offer has a contingency, ours will look very weak in comparison (especially if your current home isn’t even on the market yet). The seller of the home you want to buy will look at your offer and see nothing but a hassle. Contingent offers raise too many questions, and today’s sellers have the luxury of abandoning any complications.
2. Selling first prevents financial surprises. You’ll know the net proceeds that you’ll make from your home sale, and you don’t have any unknowns. Your pre-qualification hinges on how much money you’ll be putting down, so let’s assume you put your home on the market for $450,000, but it doesn’t sell for $450,000. What if it sells for more or less? Either scenario will dramatically impact your purchasing power, and that’s a component of the home buying process that needs to be known before you go out looking for a new house.
3. There will be less stress when you sell your home first. Your life will be made easier because you’ll know what you’re walking into. We have clear deadlines to work, and we have all the necessary variables in place for the next transaction. While it might seem more stressful to sell first then buy, the opposite is true because your competitiveness as a buyer will be much greater, and you won’t have to fret about juggling two transactions at once.
Selling your home before you purchase your next one is a decision you won’t regret. As always, reach out if you have questions on this or any other real estate topic. We’d be happy to discuss your scenario in depth and give you tips on how to navigate this wild market. We look forward to hearing from you!