Sell First or Buy First? How to Plan Your Next Move

If you already own a home and you're ready for your next one, you face one of the biggest questions in real estate: should you sell first or buy first? There's no one right answer, but thinking it through ahead of time makes the whole move smoother. Here's how I help clients weigh it.

The upside of selling your current home

Selling isn't just a hurdle to clear before you can buy. It can be one of your biggest advantages:

• Equity. If your home has gained value while you've owned it, the proceeds from your sale can go toward your next down payment.
• A stronger offer. Buyers who don't need to sell before they close can often write cleaner, more competitive offers.
• Clarity. Once your home is sold, you know exactly what you have to work with.

Option 1: Sell first

Pros: You know your budget, you won't carry two mortgages and you can shop as a strong, non-contingent buyer.

Cons: You may need a place to stay between homes. Some sellers negotiate a rent-back, staying in the home for a short time after closing, which can bridge the gap.

Option 2: Buy first

Pros: You only move once, and you can take your time finding the right home.

Cons: You may be paying two housing costs for a while, and you'll need to qualify for the new loan while you still own your current home. Some buyers use a bridge loan or a home equity line to cover the down payment until their home sells. Your lender can tell you whether those options make sense for you.

Option 3: Buy with a home sale contingency

You can make your purchase offer contingent on selling your current home. It protects you, but sellers often see it as a weaker offer, so it tends to work best when the seller has more flexibility or the home has been on the market for a while.

Questions to ask yourself

• How much equity do I have, and how much will I need for my next down payment?
• Could I comfortably carry two housing payments for a few months?
• How quickly are homes selling in my neighborhood, and in the area I want to move to?
• How flexible is my timeline for work, school and family?

Let's build your plan

The best choice depends on your finances, your timeline and the local market. I can help you figure out what your current home could sell for, what you can afford next and how to time both sides of the move. Reach out anytime, and check my local market reports for current numbers in your county.

Source and further reading: “Perks of Selling Your Home Could Outweigh Challenges of Buying”, originally published by NerdWallet, via Trending Home News.