Congratulations! You’ve put a “for sale” sign on your house and are ready to close the deal on a new home.
Most people sell their current home while in the process of buying their next one.
But what about when you get a great offer on your house and sell it before you buy? Is this a risky move or one you should avoid? Not if you know the possible advantages.
Let’s explore the good, the bad, and the ugly of selling your current home before you purchase your next one.
Advantages of Selling Before You Buy
Here are a few reasons why, though risky, selling before you buy might actually work in your benefit.
- Most sellers prefer cash buyers (or at least those with a pre-approved mortgage). It’s guaranteed payment without the headaches associated with obtaining mortgage approval. If you sell your home before you purchase a new one, it puts you in a better, more attractive position as a prospective buyer. Sellers are hesitant to move forward with a buyer whose purchase is contingent on the sale of their current home. If your home’s already sold, you may land at the top of their list!
- Being at the top of the list also means it’s less likely that you’ll be passed-up or have the new house swept out from under you. There are times when a seller gets a better offer and quite-literally sells the house from underneath a prospective buyer. With a cash offer and a house that’s already sold, you’re less likely to be hoodwinked.
- Selling your house before buying a new one gives you the time and patience to have a pleasant home buying experience. You won’t feel rushed into making a quick sale or settling for a lower price than your home is worth. Selling before you buy puts you in control of your future.
- Time is money. When you don’t feel rushed into a sale or purchase, you have more time, patience, and flexibility to negotiate a good price.
- If the seller of the home you want to buy is in a hurry, you’re now in the financial position to offer them a slightly lower price as a trade-off for a fast, easy closing.
- Once your house is sold, you’ll know your exact budget and how much money you’re working with. This means you can confidently shop for the home of your dreams!
- Depending on the current real estate market, the value of your home, and others may fluctuate. Once your house is sold, you can wait to find a new house that is affordable. You may even get a better deal if you act when the market is right!
Disadvantages of Selling Before You Buy
While having money in the bank is a good incentive for selling before you buy, there is some level of risk involved. Here are a few disadvantages to consider before you hand over the keys to your old home.
- The most obvious risk of selling your home before you buy a new one is having nowhere to live! Make sure you’re in the position to buy your new home shortly after selling your current one. You also need to be realistic. If you can’t buy a new home right away, you may end up renting for a while, which could become very expensive. Just keep in mind that although renting can be stressful and costly, rushing into a decision or being hoodwinked is even worse!
- In a real estate market where prices are on the rise, you may end up losing the house you want to buy. That’s because, by the time you sort out all the details of selling your current home and finding somewhere to rent or securing additional funds, the next house might skyrocket out of your price range.
Tips for Successfully Selling Before You Buy
If you’re keen on selling your house before you buy your next, here are some tips to keep your plans on track.
- It’s important to plan ahead. Get all your ducks in a row beforehand so that you can close on both deals quickly. This includes mortgage pre-approval, closing dates, and inspections.
- Make sure you know exactly where you want to buy before you sell. Research the school systems, distance from work, and other community features that are important to you. This narrows down your search and saves tons of time and money when it comes to purchasing your new home.
- Choose the right price for your current home. Ask local real estate agents to compare what homes like yours recently sold for.
- Considering using an online estate & letting agents to save money.
- Compare letting agent fees and the services they offer before choosing an agent.
- Keep an eye on the current market while you’re selling your house. This allows you to act fast if you see a home you want. In the process, form relationships with multiple agents so you get first dibs at the best properties as soon as they enter the market.
- Slow down the selling process. You can do this by choosing a long period of time between accepting an offer and actually closing the deal. The longer you extend this period, the more time you have to find an affordable, new dream home!
Selling Before You Buy is a (Sometimes) Risky but Rewarding Endeavor
Do you have a great offer on your house but don’t have a new home picked out just yet? Are you worried about selling before you buy? Don’t be!
There are plenty of advantages to selling your current home and having money in the bank to capitalize on your next house.
With a little planning, you can get the asking price for your current home and move into your next house in no time.