Should You Buy a House BEFORE You Sell Yours?

So should you buy first or sell first? If we're going to do both, which one should we do first and why? And so the annoying answer here is there is no universal right answer to this question. I would say if all things were perfect, most of us would buy first because it gives us the most flexibility. Let's break it down into why one or the other might be better. Okay, so the advantages to buying a home first are that we have very limited financial pressure and time pressure. So I bought a home and now I can move whenever I want. I've already fully secured where I'm going. I currently live in the old house, but I already own the other one. So I can do some repairs. I can touch it up. I can move in whenever I want. There are some financial pressures though, because if I bought first and when it comes time to sell, if I'm in any way financially sensitive, which the vast majority of us are, it does actually matter how much money we get out of the one we're selling. Now I have a little bit of pressure because I already own another home. Either I have a second mortgage or I've laid out a lot of cash or I'm now annoyed that I still own a second home. So buy first is more convenient, not a ton of financial pressure, but could have a couple of fairly significant ones. You only really have to move one time and you're extremely sure of that because you already own both homes and you don't have to move into the second one until you're totally ready. So you're not going to have to move and wait and move again. You're definitely going to be confident that you didn't have a lot of pressure on which house you bought or chose because it wasn't tied to the fact that your other home already sold or anything like that. So you can search for houses mostly stress-free. There may be some other stresses, but it's not going to be tied to the fact that you have a timeline dictated by having already sold your first house. Now, what are the advantages to selling first? So the big one is you already have your equity. You already have the money out of the home that you are living in now or were previously living in. So there's less financial stress, less confusion, less uncertainty about the money. Now you're usually in a stronger negotiating position here as well. So I've already sold the home I was living in. I have all the data I need to negotiate as aggressively or loosely as I want on the home I'm purchasing. So there's just a little bit less pressure and tension there. And then ultimately there's less at risk. The money from the house I already own is already in my bank. I already have it. So it is less at risk to make an impulsive decision. Now, there might be a little bit of pressure like we said before on the buy side, but there's a little bit less at risk. I could just say, no, I could back away even if it meant I needed to move twice or live with family or friends, which is not ideal. And we can almost always avoid that. Contingencies help a lot with this. Okay, so here's how contingencies can kind of help or hurt each side. If I'm selling my house and my purchase of my next house is contingent upon the sale of this house. As a buyer, I am very well protected from a good contingency, meaning I have the ability to back out if my house doesn't sell. Even if we execute and come fully under agreement to buy this house over here, I am not fully committed until this one sells and sells at an amount of money that I'm happy with. So it gives me a lot of flexibility as a buyer. Now, as a seller, that contingency mostly protects the person buying my house because everything I just said a minute ago is true for them. They can back out if their home doesn't sell. They can back out if their home doesn't sell for the amount of money in the contingency. But it does protect me somewhat if I've negotiated a good contingency for me, meaning if I get another buyer during this process and if that first buyer does not exercise what we call a first right of refusal or they don't remove their contingency, I then can be freed from that buyer to go sell my house to another buyer. So contingencies can help both parties in a scenario where there's two transactions happening at once or in a short period. And what I mean is selling and buying for one of the parties. A lot of this comes down to just your situation and how we walk you through your decision. So we're going to ask a lot of really thought provoking questions to help you determine, is it all about money or is timing maybe more important? Is there a job or a school year or a holiday or a family move something like that that might dictate, should we buy first or sell first? Do we even have those options? Obviously finances are going to really dictate for the most part, do we have the options? Could I financially borrow or do I have the amount of cash to buy before I sell? Or do I absolutely have to get the money out of my house before I buy? Do I need a contingency or could I do this without a contingency? The other thing that we're going to help you think through is just the market conditions. Get a fair, honest and accurate read regardless of how we feel on the market conditions of where we want to buy, what we have to sell and when we might be doing that. What's the pace of the market? What does pricing look like? Financing, supply, demand, days on market, all those things. And then finally, what are your goals and what are your timeline goals? Do you need this done in 45 days? Do you have a year to figure it out? Those are the big factors that we will use to help you make the right decision for you because there is no right decision for everybody on do we buy or do we sell first.