Best bet when changing homes: Sell first
What's the best thing to do first -- sell
your existing home or buy your new home? I hate to purchase
a home without knowing that I can sell my existing house. What
do you recommend?
I think you may have answered your own question with your
legitimate concern about the salability of your current home.
The "pros" for selling first, and then buying your
new home later, outnumber the "cons," I believe.
The one real advantage of buying first is that
you can shop for your dream home deliberately and conscientiously
over an unlimited period, and feel fully comfortable with
your buying decision before placing your old homestead on
the market. If money is less of an issue for you, and you
can afford two mortgage payments for awhile if your current
home is slow to sell, this approach may be for you.
The big advantage of selling first is you'll
know just how much equity you'll have to invest in that new
castle. You also won't have to saddle your purchase contract
with one of those "subject-to-the-sale-of-my-home"
caveats, and may attain additional bargaining power as a result.
Sellers in especially hot real estate markets are less apt
to accept "subject-to" offers because there may
be more expedient buyers in line.
Also, if you resign yourself to timing your
buy with your sale, you might be setting yourself up for a
let-down. You could locate your dream home but not be able
to sell yours fast enough to grab it.
There is an interim option. You could always
try to market your home on the contingency, "subject
to seller finding suitable housing." This strategy works
best if your home is in a seller's market and is especially
desirable to a relatively patient buyer. But also consider
that most buyers will have a time limit on just how long they'll
wait for any place, because many are in the same position
In any situation, you don't want to be forced
to buy a home quickly that may not meet all your wants and
needs -- and end up moving again soon as a result.
Of course, if you do sell and must vacate before
you find a place, the big negative is that you'll have to
figure out what to do with yourself -- and your belongings
-- during this interim period. That's one reason so many extended-stay
hotels and self-storage units were built in the last decade.
America is more transient than ever and there's been a lot
of churning of homes. Also consider a short-term apartment
lease or staying with benevolent/tolerant relatives, if you
have any. Even if you're faced with the prospect of moving
your stuff twice before you get into that new house, you might
want to hold out for that perfect house, especially if you
plan to stay there for a long time.
Of course, only you can make that call.
In any real estate deal, however, it's usually best to fortify
your bargaining stance and not be forced into rash buying
decisions. Happy selling -- and hunting!
-- Posted: Sept. 18, 2004