Working in Real Estate industry this scenario comes more often for move-up and move-over buyers, the dilemma whether to sell or buy first. In this article, I will try to explain the possible solutions and the ideal way to approach this. We will also discuss various markets and how this should be tackled.
In the perfect scenario, one should always try to have the buy and sell transactions inked in close proximity, this will allow the closing dates to not be far apart for the actual moves. To ensure this happens when you are preparing your home for putting on the market, also find the time and initiate the process to screen potential next homes. This strategy will ensure that when you sign on the dotted line to sell your home you are in a good position to finalize the buy as well in short order; as you had already begun that process.
Thumb rule for Seller-oriented Market is that you buy first, as that could take time due to competing for offers and to get a home which meets your family needs and is in your budget. Once you have bought, you can get your home on market for sale, polished and at the right price, chances are it would sell fast as it is a Sellers Market.
For Buyer-oriented Market one should ensure to Sell first and then sign the dotted line to purchase a good home; in this market situation, there would be enough inventory & you would be having a lot of choices now that the Selling aspect is done with, which was the time taking part in a buyers market. In this type of market, you don’t want to get burnt by buying first and paying an amount and then later finding out that the amount you were expecting for your sale didn’t come through, so due diligence and selling first will help.
For Neutral Market either can come first but to be on the safer side do the Sell first and can possibly have a clause to have some rent-back arrangement for a specific duration after the closing with buyers. This is to give you breathing room to do the purchase and align the moving dates, also would avoid carrying two mortgages and bridge lending unless your first home was completely paid off.
Irrespective of the market in all above situations it is opportune and ideal to get the groundwork started for both buying and selling at the same time once you have decided to move-up or move-over. This is to allow you maximum flexibility for aligning the closing dates and taking the pressure off of the whole situation, then execute one ahead of other by identifying your local market scenario from above. The key is to follow the other side of the transaction in short order & you are good.
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