Owning a home is one of the most significant investments the average person will make in their lifetime. Then a time comes that a larger or smaller house is needed, a job change requires relocation, or one is just looking for a change of scenery a new question may present itself about in which order should the selling and buying take place? A calculated decision will save money and anxiety.
An experienced real estate agent with a good grip on the local market can help with this situation, but the homeowner has some things to consider. Here are the advantages and disadvantages of selling a home first.
Cons of Selling First
When the present house is sold the homeowner is losing their residence. Not having a place to call home can be a scary prospect for some people.
Without a residence to immediately move into, spending money on a hotel or temporary apartment may become an issue. It takes time to buy a new home so if no purchase is in the works, paying for a temporary place may affect the money on hand to purchase that new home.
A seller can place a contingency clause in the seller’s agreement that states the sale will not go through if the seller cannot purchase a home. This clause is excellent for the seller, but may not be right for buyers who will not continue with this clause in the contract.
Pros of Selling First
Selling the previous home first reduces any financial questions. With the money from the sale in the bank, a person knows how much is available for a deposit on a new home plus any other moving expenses.
The seller won’t be stuck paying two mortgages. Buying a new home without selling the old one can be an expensive situation.
There is no pressure to sell. When paying two mortgages, the seller may be desperate to sell the old home and may end up shortchanging themselves because a buyer can low ball the purchase price.
If there is a house or development that is desired, waiting to sell a home may result in missing out on a dream home.
In many cases the answer is easy, the seller must sell their home to have the deposit for a new place. A real estate professional can help guide a seller/buyer through this process and give recommendations based on the individual’s situation and the local market.