Handling one home transaction is difficult enough. Handling two at the same time can feel impossible. It certainly takes a higher degree of attention, but it can be done with the right mindset and approach. This article will tell you a little more about what the process entails in a way that helps you determine whether you should buy a new home first or work on selling your current home.
Pros of selling first
You can use the proceeds from your sale
If you sell your current home before you buy your next home, you’ll have the proceeds from your sale that you can put toward your purchase of a new Lawrence Park real estate property. This eliminates the need for you to carry multiple mortgage payments at one time. You wouldn’t even know if you could have two mortgage payments at once before you talk with your lender to see if it’s something that you could qualify for. When you choose to sell first, it isn’t something that you’ll have to worry about anyways.
You’ll have more flexibility when shopping
If you choose to buy a new home before selling your current home, you might feel increased pressure to move quickly through the purchasing process because you know what’s waiting for you on the other end. If you choose to sell first, you’ve already taken care of one of the largest tasks that are outside of your control. You no longer have to worry about the right buyer coming along who can pay the price that you’re asking for on your home. You’ve completed your sale, and you have the funds in your pocket. This gives you greater confidence to shop for a new home.
Cons of selling first
There might be a gap in your living situation
If you choose to sell Lawrence Park real estate before buying a new home, there’s no guarantee that there won’t be a gap in your living situation. You may have to arrange short-term housing by booking a hotel or staying in a rental property. This is an inconvenience because it means that you’ll have to move all of your belongings more than once.
You may have to pay for storage
Some people won’t move all of their possessions into a rental space. They might choose to leave things in storage because they are renting out a smaller property or because they don’t want to have to worry about unpacking everything on a temporary basis. This is an option that you can pursue, but it creates an added expense and an extra task for you to complete.
Pros of buying first
You won’t have any gaps in your living situation
If you buy a new home before you sell your current home, you won’t experience any gaps in your living situation. You will be able to take your time moving your possessions to your new home, and you won’t have to worry about storage or short-term rentals. This is especially important if you have children or pets who may not enjoy multiple moves and constant change. You’ll also save the money that you would have otherwise spent on a storage unit or temporary housing.
You can hold for a better offer
If you choose to sell first and buy later, you might feel pressure to take the first offer that comes along, even if it’s below your asking price. You want to lock in the sure thing so that you can begin looking for a new home and decrease your chances of having any sort of gap in your living situation. This pressure decreases when you buy a new home first. You’re not worried about what’s next for you personally, and you can take your time and wait for the best offer to come along.
Cons of buying first
You might have two mortgages at one time
Before you consider this option, you should connect with your lender to discuss your ability to qualify for a second mortgage. Even though the plan won’t be for you to carry both mortgages any longer than necessary, your lender will still want to assess how long you could make both payments before it becomes a significant financial liability for you. As with any other home purchase, they will give you a pre-approval letter that tells you what loan amount and the interest rate you qualify for. You will have to prepare for the possibility that you’re making payments on both homes for several months if you choose to buy a new home before you sell your current property.
You’ll need enough cash to cover your down payment and your closing costs
Sometimes sellers must rely on the proceeds from their home sale in order to have enough money to put down on their new home. You don’t have this luxury if you choose to buy before you sell. There are additional options for funding that may make the financial burden easier for you to carry. Some sellers use a bridge loan to secure short-term funding while they wait for their home to sell.
Conclusion
Ultimately the decision to buy or sell first comes down to your unique situation and goals. You’ll have to decide how much risk you’re comfortable taking on and whether or not you can handle the inconvenience of being between houses and looking for a short-term living arrangement. You can also talk with a real estate agent who has experience helping clients handle home sales and purchases at the same time if you still have questions or if you want further insight.
Giulia Gallina has experience helping clients handle multiple home transactions simultaneously. She understands the nuances and complications that exist in this type of position, and she will help you navigate your way through each twist and turn. She has developed a reputation as one of the most successful real estate agents in the entire Toronto area, and she looks forward to helping you shop for Lawrence Park real estate.
