The home selling process can be complicated, but it's especially complicated for people who already own a home. The decision to sell their home first and then buy, or buy then sell, can be a difficult one. If you're a homeowner who would like to sell one home and buy another, it's important to weigh all the factors. Knowing the advantages and disadvantages of each option can help you decide which one is right for you.
Benefits of Selling Your Home Before Buying a New One
Some homeowners choose to sell their home before purchasing another. While this does have its advantages, there are problems that can be associated with it as well. Below, we've noted important reasons that many homeowners choose to sell first.
You Can Offer More Money Down When You Buy Later
After the first house is sold, home buyers may have a great deal of cash from the sale of their first home. This makes it easier to make a stronger purchase offer on the home they really want to buy.
You Avoid Being Rushed to Sell
Once a property is purchased, most homeowners feel great pressure to sell their home quickly. Selling the house before buying the second house enables home buyers to take their time and accept the best offer instead of taking the first offer that comes along.
You're Only Responsible for One Mortgage
For many homeowners, the burden of paying two mortgages at one time is too great. Selling first and then buying makes it possible for the homeowner to pay only one mortgage at a time. This can help relieve financial pressure at a time when many homeowners feel great financial stress.
You Know How Much Money You'll Have On Hand For Your Next Purchase
Many homeowners have a hard time deciding how to proceed with the purchase of a new house if they don't know what they can expect to make from the sale of their first home. Selling the house first enables homeowners to know how much money they can expect to make and thus how much home they can afford to buy.
Knowing the sale profit also makes it easier to make moving decisions, like whether they can afford to hire a full-service moving company. Homeowners who aren't on a tight budget feel more flexibility to buy what they want to buy and pay for services that will help them when they sell their home first.
Staging With Your Own Furniture is Easier
Staging an empty home can be expensive. Homeowners who want to stage their home to make their house look attractive to buyers can use their own furniture to stage if they choose to sell their home first. Homeowners who choose to buy a house first and move into that house may need to rent furniture just to fill their empty house.
Tips for Selling a Home Before Buying
These tips can help make selling the house first a more feasible option with reduced stress.
- Research storage facilities in the area to find a location where furniture can be stored after the house sells.
- Research home rentals in the area to understand the price of renting a home for a short period of time while looking for a new home.
- Consider renting the home while it is empty to ease the burden of paying for two mortgages.
- Work with a real estate professional to make purchasing a house easier once the first house sells.
Drawbacks of Selling Your Home Before Buying a New One
Despite the reasons above, there are some reasons not to sell a house before buying a new house. Here's what homeowners need to know.
Living in Temporary Housing is Expensive
Temporary housing can be expensive, depending on whether the renter is paying by the day, the week, or the month. Temporary housing can be especially expensive if it's furnished. In addition, rental properties may require the renter to put down a large deposit, which they may not get back when move out time comes.
You May Rush the Purchasing Process
Once the first house is sold, most homeowners want to move into their new house as soon as possible — especially if they're not able to find a feasible rental home to live in while they're looking. This can make for a rushed home buying experience, which can lead to settling for the wrong house, or getting a house for a less than optimal price.
Moving Twice is a Burden
Once the house sells, the homeowner must move their furniture into a storage unit. After buying a new home, they must then move their stuff into their new home and out of their storage facility. Moving twice is a burden financially and in other ways. Moving twice can also be time-consuming.
Benefits of Buying a Home Before Selling Your Existing Home
For some homeowners, the right choice is to buy a house before selling. Below are some benefits of buying a house first.
You Aren't Rushed During the Purchasing Process
Purchasing the home first enables home buyers to take their time, find the right house for their own needs, and get the best deal possible. For home buyers who want to find their forever home, this could be the best option.
You Only Need to Relocate Once
Homeowners who move straight out of their old home and into their new home only have to relocate their furniture and personal items once. This makes it easier to save money on moving expenses and is also far more efficient. Relocating only once saves time.
You Can Move at Your Own Leisure
Once the second home is purchased, the homeowner can take time to move their things out of their home. This makes the moving process less stressful and overall easier. Homeowners who are able to move out of their old house a bit at a time may also save on moving costs by avoiding hiring a large moving crew.
Drawbacks of Buying a New Home Before Selling Your Existing One
Buying a home first isn't for everyone. There can be significant downsides to buying a home first and maintaining two properties at the same time.
Buying First Rushes the Home Sale
Once the first home is purchased and moved into, the homeowner may feel the need to sell their old home quickly. This could lead the homeowner to accept the first offer that comes along, which could lead to a loss of profit. In addition, buyers who sense that the homeowner is very motivated may ask for more concessions before agreeing to buy the home.
Two Mortgages Can Be a Financial Burden
Most homeowners cannot afford to pay two mortgages at once. This creates financial strain that can lead to stress. Homeowners who must pay for two mortgages at once may not be able to afford repairs to their new home and may be vulnerable to other risks. Without adequate money to pay for unexpected big expenses, homeowners could eventually find themselves deep in debt.
Since no homeowner can predict exactly when their first house will sell, this could lead to months of paying for two mortgages at once. The longer this goes on, the more the homeowner stands to lose.
You're Responsible for Maintenance on Both Homes
Maintaining a home can be expensive, and maintaining two homes can be doubly expensive. Homeowners who have two houses at once will find themselves paying utilities and other maintenance costs for both homes at the same time.
Tips For Buying First
Homeowners who would like to buy their home first and then sell should work with the best real estate agent they can find. Their real estate agent can help them sell their home quickly and efficiently to ensure their costs are kept to a minimum.
Contact Your Real Estate Professional
Whether you're selling a house first and then buying, or buying a house and then selling, you should work with your real estate professional to make the home selling and buying process as easy as possible. If you're going to be selling a home and then buying a home sometime in the next six months, contact an experienced real estate professional today.