Selling Before or After Purchasing Your New Home: Which Approach Is Best?
The decision to sell your property is a significant milestone, but it often comes with the dilemma of timing. Should you sell your current home before purchasing a new one, or is it wiser to secure your new residence before parting ways with your existing property?
Not all situations are the same, so it’s important to communicate all of your home-/selling details and timelines with your real estate agent in Ontario. Your real estate agent should be able to support you in figuring out what is the best approach when selling your property before or after you purchase your new home.
Here are some pros and cons to keep in mind when it comes to buying a house in Scarborough before or after selling your home!
PROS TO SELLING BEFORE PURCHASING
Financial Certainty
- Selling your current property before buying a new one provides a clearer picture of your financial situation. You’ll know exactly how much equity you have to work with when purchasing your next home.
Negotiation Power
- With the funds from your sold property in hand, you may have stronger negotiating power when making an offer on a new home. Sellers often prefer buyers who have already sold their current property, as it reduces the risk of complications in the buying process.
No or Less Conditions on Offer
- You won’t have to include conditions related to the sale of your current home in your offers on new properties, potentially making your offer more attractive to sellers.
CONS TO SELLING BEFORE PURCHASING
Temporary Housing
- If you sell your home before buying a new one, you may need to arrange for temporary housing. This could involve renting, staying with family or friends, or securing short-term accommodation, which may be very inconvenient.
Market Timing
- Timing the sale of your current property with the purchase of a new one can be challenging. You might find yourself in a hot seller’s market but a competitive buyer’s market, or vice versa. Working with an experienced real estate agent can give you a clearer idea of what to expect in the current market.
PROS TO PURCHASING BEFORE SELLING
Smooth Transition
- Purchasing your new home before selling your current one allows for a smoother transition. You can move directly from one property to the next without the need for interim housing arrangements.
Stress Reduction
- Knowing you have a new home secured can reduce the stress associated with selling. It provides a sense of security and stability, allowing you to take your time preparing and staging your current property for sale.
CONS TO PURCHASING BEFORE SELLING
Financial Strain
- Buying a new home before selling your current one can be a big strain on your finances. You might have to manage two mortgages, potentially impacting your debt-to-income ratio and overall financial stability.
Conditional Offers
- If you make an offer on a new property before selling your current home, you may need to include a conditional clause related to the sale of your property. This can make your offer less attractive to sellers, especially in competitive markets.
The decision to sell your property before or after purchasing a new one ultimately depends on your financial situation, risk tolerance, and the current real estate market conditions.
Both approaches have their advantages and challenges, and the right choice for you will depend on your personal circumstances and preferences.
Get in touch with our team of real estate agents in Ontario today and we will be happy to provide valuable insights and guidance tailored to your specific circumstances, helping you make an informed decision that aligns with your goals!