Why does it matter? Making the wrong choice could lead to problems like money worries and stress. It could even trigger legal problems, and a whole lot of anxiety, too. Not fun, right?
And if you're making a decision as a family - both of you need to be on the same page.
Buying or selling a house involves many things—some you can control, some you can't. Things like the housing market, the uniqueness of properties or finding a temporary place to stay, can't be changed.
You can look at your money situation, how much risk you're okay with, and what you've done before. All these things help you make a good choice.
There is a risk-free option - buying a home with a condition that you can sell yours. In the business we call this a condition of "SBP" (Sale of Buyer's property) This sounds good, but there's a lot to this. In this type of arrangement, we negotiate: the length of condition, escape clauses, non-refundable deposits, among many other terms. Expect to pay a premium to get this type of offer accepted. Sellers usually don't go for this idea in areas where houses sell quickly. It's more often used when the housing market is slow where you're buying and hot where you're selling.
Now, let's break down the pros and cons of the buy first/sell first options:
Buying first: Imagine knowing exactly where you're headed! You can pick a property in your favorite community. The risk, of course, is you might end up owning two homes, or selling for less money if the housing market isn't great. In this case you'll need to do a lot of financial pre-planning. I find this works best for homeowners looking for a very specific property, want to renovate before moving in and have a good financial cushion they can draw on short term.
Selling first: You sell your current home first. It's exciting because you'll know how much money you have for a new home. But, here's the twist: the perfect new home might not be available when you're ready, or you might need to rent a place until you find one you love. Renting can be tricky or expensive. For this option you need to be flexible with your purchase - and take comfort in knowing you'll make a finance based decision.
In a nutshell, it’s a bit like a teeter-totter, and these decisions can tip things one way or another. Remember, there's no one-size-fits-all answer. But with some financial planning & a bit of risk evaluation, you’ll find the answer that best fits your situation.
The good news is you don’t have to do it alone, because I have helped many people through these decisions!
