Homeowner’s Quandary - Should I Buy before I Sell?

 

One of the biggest issues homeowners struggle with rears its head when it is time to make a move.  The question that confronts almost everyone is whether to buy or sell first when moving from one home to another.   It is an important decision, worthy of careful consideration, with advice from your Realtor and accountant or financial advisor. In the final analysis, the answer will depend on the following three key variables – your financial situation, current market trends and your comfort level when it comes to risk.

Before making any serious moves toward buying or selling, take the time to sit down with a professional Realtor and mortgage lending specialist.  You will need to estimate as closely as possible how much equity you will retain from the sale of your home following the mortgage pay-off and then determine how much you can afford and wish to spend on a new home. You also need to calculate how long you can realistically carry the expenses of two homes at once, if necessary, if you are willing to do that at all. 

Of course, if you are fortunate to have enough money and the spectre of carrying two sets of home ownership costs does not pose a problem, then you should go ahead and buy first.  Since you will not be under any pressure to find a home in a hurry, you will be free to wait for your perfect dream home to come on the market.

Real estate trends and market forces can shift direction very quickly.  A strong sellers’ market can become ancient history in a matter of weeks and a seemingly entrenched buyers’ market can also shift direction in the blink of an eye.  Buying first in a strong sellers’ market is obviously less risky than making the same move in a stagnant market with few sales.  The condition, location and size of your home will also play a role in its marketability, particularly in a balanced market such as the one we are now experiencing in Calgary.  Again, this is where the advice of a seasoned local Realtor in tune with the current trends comes into play.

Buying before selling does present certain risks for the vast majority of people who do not possess unlimited wealth.  Before making any move to buy first, ask yourself how much risk you can handle, and more importantly, how much risk are you comfortable with?  There are obvious advantages to buying first.  You can sit back and wait patiently until the right property comes on the market and the entire moving and relocation process is always smoother when you do not have to coordinate two sets of closing schedules.  Still – you have to be comfortable with the level of financial risk that this approach carries with it.

The decision to buy or sell first is a tricky one.   Help yourself to make the best decision for you and your family by working with experts to maximize gains and minimize risk.