Are you thinking of moving? If you are, then you are probably lying awake at night trying to decide if it is better to buy first or sell first. In a perfect world, most sellers would love to find a buyer for their home and at the same time find their dream home. The transactions would coordinate perfectly and there would be no worries regarding financing or timing. While this can happen when all the stars align (and with experienced agents navigating the process), it is usually a little more complicated process. On top of all the normal stresses of moving, today’s fast-moving market adds additional challenges.
Let’s take a look at some of the pros and cons to both approaches.
SELL FIRST, THEN BUY
PROS
• The safest financial decision and will not involve owning two homes.
• All the proceeds from the sale of your home are liquid.
• No worries about temporary financing or borrowing from a 401k.
• No need to negotiate a lower price to sell your home quickly to avoid two mortgages.
CONS
• In this fast-paced market, the sale of your home will most likely need to be finalized first. In a seller’s market, the chance of getting a contingent offer accepted is not promising.
• The stress and cost of moving multiple times if you don’t find a home to purchase right away.
• The rental market is very competitive and expensive. Finding a short-term rental is a challenge as many traditional rentals are now VRBOs.
• The cost of renting a storage unit is high and storage units are in short supply.
• In today’s market, it may take months to find the right home and you could get priced out of the market while you are sitting in a rental.
BUY FIRST, THEN SELL
PROS
• You have the time to find just the right home and not make a rushed decision.
• Minimum disruption to your life.
• Move in at your own pace to your new home.
• Have time to remodel and update the home you are purchasing before you move in.
• Make more money on your existing home due to increasing values.
CONS
• Not having the liquidity to purchase your next home before selling your first one.
• Potentially having to manage two mortgages for a period of time.
• May cause you to accept a lower price on your first home if you can no longer afford two mortgages.
• Maintenance on two homes can be twice as expensive.
So, what do we think? Because the market is moving so fast and values have been increasing so rapidly, it actually makes the most sense to buy first and then sell if you can make it work financially. However, there is not a definitive best order to buying and selling. It all depends on your personal and financial circumstances. The good news is that now, more than ever, we have amazing tools in our toolbox to help sellers find ways to buy first and then sell. From creative financing, to a plethora of buyers waiting in the wings, now is the time to take advantage of finding your dream home before you sell.
We make this happen all the time and we have the experience to help you craft a winning real estate strategy. We can help you get answers quickly and help you get on your way to your dream home! Give us a call and we can schedule a time to draft a custom plan of action that fits your needs.
John and Natascha Karadsheh are co-owners of KOR Properties, a boutique real estate brokerage serving the Valley of the Sun, and the creators and founding sponsors of Mesa Food Truck Fridays. John has been a Multi-Million Dollar producing agent for over 19 years and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS), a member of the Arizona Regional MLS Rules & Policies Committee & Appeals Committee and the West and Southeast Realtors of the Valley Professional Standards Committee.
Natascha is an Associate Broker, a Multi-Million Dollar Producer, Founder of Mesa Food Truck Fridays and Member and Past-Chair of the City of Mesa Economic Development Advisory Board.
You can reach John at (602) 615-0843 and Natascha at (602) 909-4995, or visit their website: KORProperties.com.