Do I Sell First or Buy First?
This article authored by: Catherine Hallberg
Co-ordinating the sale of your current home with the purchase of a new one can be tricky.
The ideal situation is to purchase a new home and then place yours on the market and begin moving into your new digs. Many homeowners need the cash from their current house to purchase a new place creating the dilemma:
If my home sells before I find a new home, then I’ll have no place to go. Conversely, if I place an offer on a new home and my home doesn’t sell right away, then I’m faced with two mortgages.
Many Sellers and Buyers are faced with this question. Your answer will depend on your individual situation. Purchasing new construction can buy you some time, as many builders will accept a contingent offer on a new home since it takes several months to build one. If you can’t sell your home in the allotted time period, you may well lose your earnest money which can be $5000 or more.
Finding a resale can get you more upgrades or a larger lot but getting a Seller to accept an offer on a home which doesn’t have an accepted offer on it is not easy. Why would they take their home off the market based on a future event for which there is no timeline? You’ll have better success making a contingent offer on a home if yours is already under contract. The Seller is at less risk. Some Buyers say that the Seller can accept their offer and cancel if another offer comes along before the Buyer’s home sells. The reason this doesn’t work is that when a home listed on the MLS accepts an offer, the status must be changed from “Active” to “Active Contingent”. This reduces the number of potential showings. It doesn’t benefit a Seller to do this, so you’re back to square one.
My advice is to place your home on the market and formulate a Plan B if it sells quickly. You can store your furniture and stay with relatives or rent a short term rental. You can see if the buyer of your home would do a leaseback. If they’re not in a hurry to move, many will do this on a short term basis. If nothing else, it will motivate you to get out there and look in earnest.
Timing a buy and sell is always uncertain, but planning ahead will place less stress on you in the long run.
Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Send Rob and Catherine an email for a fast response to your questions; for an even faster response, Call (520) 407-8667.