If you own your home and are looking to move on you are inevitably faced with a tough choice: should you sell first or buy first? There are many factors that come into play when deciding which option is right for you, including (but not limited to) the amount of risk you are willing to assume and the timeframe that you are working within. Other factors, such as current market conditions,the time of year, your current, desired location and property type will also inform the strategy that is right for you. These are all important considerations, as there is no "one size fits all" strategy.
General rule of thumb
While each situation has its own unique challenges, the general rule of thumg is that in a a seller’s market - you should be looking at buying first; in a buyer's market, you should consider selling first. If there is a limited number of listings, or properties are selling quickly, then it may take longer than usual before you are able to make a successful purchase offer. On the other hand, if the supply of available home is generally greater than the number of people looking to buy, it may take longer to sell your home.
The two primary advantages of selling first (and buying later) are that you will know how much money is coming your way and what your purchase timelines will be. Unlike in the situation where you buy first and sell later, you are more likely to avoid carrying two mortgages for any length of time. On the flip side, selling first can make for a stressful home hunt, and can lead some buyers to make a less-than-optimal purchase decision.
If you buy your next home first, you have the advantage of knowing what time frame you are working within to sell your current home. The biggest risk here is that depending on how long it takes to sell your current property you may need bridge financing in order to carry two mortgages for some period of time. That said, if you do buy first, you can try to negotiate a longer closing to give you a buffer while attempting to sell your current home.
Talk to an expert
The process of selling your current property and buying your next one often requires a significant commitment of time and energy. To assist with this process, you can reach out and get insights from yourAdvisor. Having the most up-to-date insights into current market trends will allow you to make a more informed decision, and in doing so, will help to minimize any potential risks.
Looking to buy or sell your home? Our rennie advisors specialize in every neighbourhood across the Lower Mainland and can help you find the home best suited to your needs.