Whether you’re moving to a new, bigger home, or downsizing when you become empty nesters, the timeline of buying and selling homes rarely coincides perfectly. So the question is, “Should we sell first or buy first?”
Selling your home before getting serious about buying a new one has some distinct advantages, no matter what the market is doing.
Time is on your side
By selling first, you give yourself the ability to negotiate on both sides of the equation. You can always ask the buyer for a later move-out date so you can have a little extra time to find a new home.
You can be sure how much cash you’ll have on hand
With your first home sold, you have the added advantage of using equity to make a larger down payment and can play hard ball when it comes time to make an offer on home #2.
You’re more likely to get your target price
If you buy first, you may be forced to take an offer that is much lower than what is fair. Agents know that if you’ve bought another home, they have an advantage during the negotiation. You’ll want to avoid having two mortgage payments. They also know that most people’s income will not qualify for a second mortgage with most lenders. They will use that to their advantage.
Most agents will not allow a contingency clause
If you make selling your home contingent upon finding a new one, you are in essence under no obligation to sell. That leaves them with a huge question about their future. Smart agents will not allow this to happen.