In Today’s Real Estate Market, Should You Buy or Sell First?
Buy First and Be Ready to Sell
1. Get a Home Equity Line of Credit (HELOC) and Mortgage Preapproval
A HELOC allows you to use your current home’s value to make a down payment on your new home. Once you close, you repay the HELOC with the money you make from the sale. This is an incredibly helpful tool that can give you more access to the cash you’ll need to buy your new home.
2. Prepare Your Current Home to List
Consult with a real estate agent about everything you need to do to get your home market-ready.
making any necessary repairs
decluttering and donating unwanted items
staging your home to highlight its best features
having professional photographs or videos taken to use for marketing
3. Find a New Home and Make an Offer
By this point, you've likely been keeping a close eye on the towns and neighborhoods where you hope to purchase your new home. Now it is time to begin serious shopping. Once you find a home you love, you'll consult with your Real Estate Agent about how to position your offer to be competitive while still feeling comfortable to you.
- the selling price for comparable homes in the area
- any obvious repairs, system replacements, or renovations you'll need to make
- how much competition do you anticipate the property to generate
- your budget, including how much cushion to leave for negotiations
4. List Your Current Home Immediately
As soon as you have an accepted offer, it’s time to get your current home listed. The goal is to sign a P and S on the house you are selling the day before you sign a P & S on the house you are buying.
5. Try to Make the Closing Dates Match Up as Closely as Possible
While it isn't easy, the goal is to get your home sale and home purchase closing dates to match up as closely as possible.
If You Sell First, Be Prepared for Two Moves
1. Make a Temporary Housing Plan
Figure out how much you can afford to spend on temporary housing and what will work best for your family. If you can stay with family or friends, this can alleviate a lot of the financial strain. Alternatively, you might need to find a short-term rental with the help of your real estate agent.
2. Get Preapproved for a Mortgage
Preapproval will ensure that you are ready to begin your home search in earnest as soon as your current home sells. It will also put you in a stronger position to rent back your home if you need to.
3. List Your Home for Sale
Work with your agent to prepare and list your current home. Because selling before you buy eliminates some of the timing pressure, you can likely be a little bolder with your listing price. Once you close on the sale, you can begin shopping for your new home.
4. Put Items in Storage, and Move them Into Your Temporary Housing
It's time to move number one (unless you've arranged to lease back your property). You'll likely be putting furniture and other items into storage and heading to your temporary housing arrangements while searching for a new home.
5. Make an Offer and Settle in Your New Home
With more liquidity resulting from closing on your home sale first, you'll be ready to make a strong offer when the right home comes along. Once you have closed on your purchase, it's time for move number two. You can bid farewell to your temporary housing and settle into your brand new home-sweet home.
How to Decide What’s Right for You?
Buying Before Selling
- You know where you'll be headed next and can avoid the frustration and expense of moving twice
- You won't feel as much pressure to settle for a new home that isn't what you want
- You will need to sell fast, which could mean a lower sale price, though not always!
Selling Before Buying
- You will have more cash available for a down payment on your new home
- You may be able to list at a higher price and be more selective about choosing a buyer
- You will likely have to deal with the expense and hassle of finding temporary housing and putting items into storage