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Navigating the complex world of real estate can be daunting, especially when you’re caught in the crosshairs of a significant decision: Should you buy your next home before selling your current one, or vice versa? Many homeowners grapple with this dilemma, seeking a balance between financial prudence and logistical ease.
The choice is seldom black and white. Buying first offers a seamless transition, yet poses potential financial burdens. On the flip side, selling your home first clears up finances but can rush your next purchase.
In this post, we’ll look at factors to consider, unpack the pros and cons, and provide tips on how to tackle this real estate conundrum with more confidence. We’ll also share details about HomeLight’s Buy Before You Sell program, a modern solution that can bridge this gap, providing a smoother transition.
Should you buy a house before you sell your house?
This decision hinges on numerous personal, financial, and market-specific factors. Here’s a breakdown to guide your thought process:
- Your financial health: Assess your financial stability. Can you afford to pay two mortgages simultaneously if your current home doesn’t sell immediately? If not, buying before selling might strain your finances.
- Market conditions: If it’s a buyer’s market, you might find great deals on homes and might be tempted to buy first. But remember, selling your house might take longer. Conversely, in a seller’s market, your home might sell quickly, but finding a new one could be a challenge.
- Your risk appetite: Are you comfortable with the uncertainties and potential financial risks of owning two properties simultaneously? Some homeowners are OK with this risk, believing that the right home is worth the gamble, while others prefer the safety of a one-at-a-time approach.
- Logistical considerations: Buying before selling can make the moving process smoother. You can transition directly to your new home. However, this approach can also mean maintaining two properties for a while.
- Emotional factors: For some, the idea of selling their current home without having the next one lined up can be anxiety-inducing. If having a sure next step provides peace of mind, buying first might be preferable.
- Long-term perspective: Consider your long-term plans. If you’re looking at staying in the new home for many years, it might be worth buying it when you find your perfect match, even if it means juggling two properties for a while.
The decision boils down to your individual circumstances, preferences, and comfort levels. To further help you decide, let’s take a quick look at the key pros and cons of each route.
Pros and cons of buying first
- Peace of mind: By securing a new home first, you eliminate the uncertainty of where you’ll relocate. This means no frenzied house hunting after your current house is sold.
- Smooth transition: You can move directly from your old house to the new one, avoiding the need for temporary housing or storage for your belongings.
- Strategic position: In a competitive market, buying first ensures you don’t miss out on your dream home just because you’re waiting for your current home to sell.
- Flexible timelines: You have the luxury of time to plan your move, decorate, or even carry out renovations in your new home before settling in.
- Financial strain: There’s the looming possibility of juggling two mortgages if your current home doesn’t sell quickly.
- Market risk: If property prices drop after your purchase but before your sale, you might end up selling your old home for less than anticipated.
- Pressure to sell: Having purchased a new home, there’s added pressure to sell your current house quickly, potentially leading to rushed decisions or lowered selling prices.
Pros and cons of selling first
- Financial clarity: By selling your home first, you’ll know exactly how much money you have from the sale, allowing you to set a clear budget for your next purchase.
- No double mortgages: You avoid the potential burden of paying two mortgages at once, offering financial relief and fewer complications.
- Negotiation power: Without the pressure of a house waiting in the wings, you can be more flexible and strategic in negotiating the sale price of your current home.
- Freedom to wait: Without a new home already in the picture, you can take your time to find the perfect next house without rush.
- Housing gap: There’s a risk of a time gap between selling your current home and buying your next one, potentially leading to the need for temporary housing.
- Rushed decisions: The pressure to find a new home quickly can lead to hasty decisions or compromises on what you truly want.
- Market volatility: If property prices rise after your sale and before your purchase, you might end up paying more for your next home.
- Temporary inconveniences: Moving twice, first into temporary housing and then to your new home, can be logistically challenging and stressful.
HomeLight’s solution: The Buy Before You Sell program
Balancing both sides of a move can feel like walking a tightrope, especially when you’re trying to buy a new home while selling your current one. HomeLight recognizes this challenge and offers a solution tailored for homeowners like you: The Buy Before You Sell program.
How it works
HomeLight’s Buy Before You Sell program is available in California, Florida, Texas, Colorado, and Arizona. This short video provides an overview of the process.
- Apply in minutes with no commitment: Find out if your property is a good fit for the program and get your equity unlock amount approved in 24 hours or less. No commitment is required.
- Buy your dream home with confidence: Once you’re approved, you’ll have access to a portion of your equity in your current home. You’ll be able to submit a competitive offer with no home sale contingency at any time — regardless of how long it takes to find your dream home. Our near-instant Equity Unlock Calculator lets you estimate how much equity we can unlock from your current home.
- Sell your current home with peace of mind: After you move into your new home, we will list your unoccupied home on the market to attract the strongest offer possible. You’ll receive the remainder of your equity after the home sells.
- Flexibility in timelines: No need to sync up sale and purchase dates perfectly. This program gives you breathing space to plan your move without feeling hurried.
- Financial peace of mind: Say goodbye to the stress of potential double mortgages or dipping into savings to bridge the gap between homes.
- Enhanced buying power: In a seller’s market, a non-contingent offer can stand out, increasing your chances of landing your dream home.
- Sell for up to 10% more: After you move, you can list your old home unoccupied and potentially staged, which can lead to a higher selling price, according to HomeLight transaction data.
For homeowners caught in the push and pull of wanting to buy a new home while still having a current home to sell, HomeLight’s Buy Before You Sell program offers a convenient and stress-reducing solution. It’s all about empowering you, ensuring your real estate journey is as smooth and rewarding as possible. See more program details at this link.
*Check with your agent about availability and pricing in your market.
Buy Before You Sell customers Hunter W. and Angela B. of Sunland, California, described their experience with HomeLight:
“We not only had the advantage of moving into our new home before listing our old home but also were able to sell for more than expected.”
(Their old home sold for $159,000 over asking price.)
As a real estate solutions company, HomeLight also offers other services for homebuyers and sellers nationwide, such as Agent Match to find the top-performing real estate agents in your market, and Simple Sale, a convenient way to receive a no-obligation, all-cash offer to sell your home in as little as 10 days.
Addressing buying services provided by HomeLight, Joseph A. of San Diego, California, writes:
“I couldn’t be happier with my experience with HomeLight and their amazing staff! I can honestly say that it’s been my best experience with any of the seven property purchases I’ve made over the years. They were responsive, helpful, and patient. I couldn’t recommend them more highly.”
HomeLight was founded in 2012 and has an accredited A+ rating with the Better Business Bureau. The company has earned a 4.8-star Google Review rating from past clients. You can read more customer testimonials at this link.
6 tips to balance a buy-sell transaction simultaneously
Here are some final tips to guide you through your decision process:
- Engage with a trusted Realtor: Collaborating with a seasoned real estate agent, especially one familiar with buy-sell transactions
- Talk to lenders or financial advisors: Know what you can afford and understand the potential risks of dual mortgages or bridging loans.
- Have a contingency plan: This might mean considering short-term rentals, storage solutions, or flexible move-in dates.
- Stay organized: Keep detailed records, maintain a timeline, and use tools or apps to stay on top of tasks and appointments.
- Negotiate flexibly: Understand that both buying and selling might require some level of compromise, such as move-in dates, repairs, or pricing.
- Maintain your property: Ensure your current house remains in show-ready condition. The better it looks, the quicker and potentially more profitable the sale.
Whether you buy or sell first, HomeLight can help
Mastering the dance of buying and selling a home simultaneously may seem daunting, but there are ways to remove uncertainties and determine whether you should buy a house before selling yours or the other way around.
While both approaches have their merits and challenges, the right choice largely hinges on your unique circumstances, market conditions, and personal preferences.
At HomeLight, our commitment is to illuminate your real estate journey. Whether you’re drawn to our trusted Buy Before You Sell program or seeking expert insights from a leading real estate agent in your city, we’re here to assist.
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