Should You Buy or Sell Your Home First?

Should You Buy or Sell Your Home First? A Guide to Making the Right Decision

One of the most common questions homeowners face is whether to buy a new home first or sell their current one. This is a tricky decision, and the right answer depends on several factors, including your financial situation, the state of the real estate market, and your personal risk tolerance.

In this blog post, we’ll break down the pros and cons of both buying and selling first, so you can make an informed decision that suits your needs.

Common Concerns: The Fears of Buying or Selling First

Most people fear selling first because they worry about being unable to find a new home before they must vacate their current one. No one wants to face the possibility of being left homeless or having to rush into a purchase out of desperation.

On the flip side, the concern with buying first is that you may not be able to sell your current home as quickly or for the price you expect. This could leave you financially stretched, paying two mortgages at once or relying on bridge financing to cover the gap.

Both scenarios carry risks, but the best choice for you depends on your specific situation. Let’s explore the pros and cons of each.

Reasons to Buy First

1. Lock in a Low Interest Rate
In today’s market, interest rates are at historic lows, but they may not stay that way. If you buy first, you can lock in your mortgage rate for 90–120 days. This gives you the advantage of securing lower monthly payments for the long term. However, keep in mind that you need to complete the purchase within that timeframe to benefit from the locked rate.

2. Financial Flexibility
Buying before you sell gives you more flexibility with your finances. While it comes with the risk of having to carry two mortgages or use bridge financing, if you can comfortably afford it, this might be the right move. It also allows you to take your time selling your current home.

3. Quick Sale of Your Current Home
If you know your current home is in high demand and will sell quickly, buying first can minimize the risk of being stuck with two homes. In a hot real estate market, you can reasonably expect your property to sell fast.

4. Competitive Market for Your Dream Home
If the type of home you want to buy is in high demand with limited inventory, you might need to act fast. Waiting to sell your home first could mean missing out on your ideal property. Buying first ensures you have a place lined up, even if you have to compete in a multiple-offer situation.

5. More Options to Choose From
If you’re a selective buyer who needs a wide range of options, buying first might be better. It allows you to take your time finding the perfect home without the pressure of needing to move out immediately.

6. Planning Renovations
If you plan on making significant renovations to your new home, buying first gives you the option to complete those renovations before moving in. This prevents you from living through the disruption of construction and ensures you move into a fully finished home.

Reasons to Sell First

1. Clear Timeline for Your Move
When you sell first, you know the exact dates for your sale’s completion and possession, giving you a solid timeline for when you need to buy and move into your next home. This can reduce the stress of lining up dates and help you avoid the need for bridge financing.

2. Set Budget
Selling first means you know exactly how much money you’ll have for your new purchase. Instead of estimating how much your home will sell for, you can confidently budget for your new home, eliminating the risk of overspending.

3. Backup Living Plans
If you sell first and haven’t found a new home, having a backup plan for temporary living arrangements—whether with family, friends, or a short-term rental—can ease the pressure. Knowing you have a place to stay gives you peace of mind during the transition.

4. High Demand for Your Current Home, Low Competition for Your Next One
If your current home is in high demand but the type of property you’re looking to buy isn’t, selling first may be the way to go. You can sell your home quickly and for top dollar, then take your time buying in a market with more inventory and less competition.

5. Avoid the Financial Burden of Two Mortgages
Selling first means you avoid the financial stress of managing two mortgages simultaneously. If your financial situation or risk tolerance isn’t strong enough to support the possibility of carrying two mortgages, selling first is a safer bet.

In Conclusion: Buy or Sell First?

There’s no one-size-fits-all answer to this question. The right choice depends on the current market, your financial situation, and how much risk you’re willing to take on. In today’s hot seller’s market, it might make more sense for most people to buy before selling, as home prices are rising rapidly and inventory is limited.

However, if the market cools and it becomes more of a buyer’s market, selling first could make more sense. You’d be able to secure a higher price for your current home while having more options and less competition when buying your next one.

If you’re still unsure about which option is best for you, I’m here to help! Reach out to me for a personal consultation where we can discuss your specific situation, and I’ll help you make the best decision.