“Dave and Kayla were married back in 2012. They bought their first home in a quiet neighborhood just outside of Okemos. They loved their first house and poured their creativity and love into making it a home. Dave and Kayla always knew that this house would be a starter home, and now, five years later, Dave and Kayla are thrilled to be expecting their first child. While they would love to stay in their current home, it will be crowded as they become a family of three. Dave suggested they start to look for a new house before the baby comes. Kayla, though a little overwhelmed, agreed. Now the question is raised: “do we buy a new house, or sell our current house first?”
Buying a home PRIOR to selling your current home
Kayla and Dave are unsure which step to take first in the home buying/selling process. The couple decided that they are interested in buying a home PRIOR to selling their current home.
Buying before selling may mean that Dave and Kayla…
LIKE TO HAVE A PLAN IN PLACE
Dave and Kayla always like to have a plan in place and what is next for their family. If you also identify as a planner who likes knowing all the logistics, buying a new home BEFORE selling your current home eliminates the risk of not knowing where you will lay your head in a month. Timelines, however often play a role in purchasing a home. If a seller needs to be in a certain location by a set date for school, a job, etc., they will need to plan accordingly. Buying before selling a current home can also save on moving costs, compared to if Dave and Kayla had to relocate to a rental between a sale and finding a new home.
HAVE FOUND THEIR DREAM HOME
Dream homes cannot be passed up. Buying a home is an incredibly emotionally driven purchase, and a big investment. When our clients find their dream home prior to selling their current home, we want to do everything in our power to obtain that perfect house. Stretching out a purchase or sales timeline can sometimes be beneficial. In many instances, the ability to purchase a dream home before selling a current home will also depend on the listing and asking price.
Buying a new home before selling your current one can be risky business. Here are a few factors for Dave and Kayla to consider:
Financial stress is the greatest risk to buying a home before selling. Checking with their bank and financial advisor to determine the financial feasibility of possibly owning two homes at once is crucial. Are Dave and Kayla able to get pre-approved for a mortgage?
- Current Market Conditions
Having an understanding of the current market in which they are selling and buying impact the couple’s plan of action.
Dave and Kayla must research the current market conditions in the area that they are looking to buy and sell in. Comparing the price point of both homes and acknowledging the current season of the year, can all play a role in their decision to buy first. (link back to previous blog post about how seasons affect buying and selling homes)
“Current market dynamics could play a large role in deciding whether buying first or selling first is the right move. In a buyer’s market, it’s possible to make an offer on a new house contingent on the sale of an existing home.”
Selling a home PRIOR to buying
Turns out that Dave and Kayla are not in a rush to move into a new home and are patiently seeking out their dream home. They have a plan in place for after the sale to temporarily live with Dave’s parents.
Dave and Kayla should consider selling their current home before purchasing a new home if…
THEIR TIMELINE ALLOWS FOR FLEXIBILITY WHEN SELLING THEIR CURRENT HOME
We always tell our clients that ‘if you aren’t in a rush, yourself, don’t rush into buying a home. Occasionally, clients who are interested in selling their home won’t have any timelines to meet or obligations to uphold. They are simply aiming to sell their house at some point in time. In our initial consultations with folks looking to sell their home, we always ask several questions to understand what their plans are for selling AND buying. Establishing these intentions and desires helps the process to move along smoothly. It is also imperative that current sellers, like Dave and Kayla, have full awareness of their finances and have been in communication with their bank. If there is no hurry to sell a home, it is less risky from a financial standpoint, to hold off on purchasing a new home until after the sale of the current home has been made.
THEY HAVEN’T FOUND THEIR DREAM HOME
Selling Dave and Kayla’s current home and finding their future dream home are our biggest priorities. To be able to find the best home for them and their growing family,may mean that Dave and Kayla will have to sell their current home before they find their dream property. Here at the Buffington Real Estate Group, we are constantly in search of a home that fits our client’s wish list. Our agents are proactively seeking out opportunities to find the right location, price point and house to meet the criteria.
Now, let’s say Dave and Kayla sell their current home before purchasing a new home, they have several options. Because the couple worked with the Buffington Real Estate Group, they have a plan in place for when their home sells. The first thing to do is…remain calm. Because of their well-outlined plans made during their client consult, they know what comes next (even if they haven’t bought a new home yet). Oftentimes, individuals who sell their homes will have plans to move into temporary rental homes, rent from their real estate agents, sell on contingency or, like Dave and Kayla, plan on moving in with the in-laws for a couple months. It is important not to rush into the decision of purchasing a new home. Finding a home that hits all of the marks on Dave and Kayla’s wish list is a valuable priority to us.
There are two routes to take when you are selling your home: buying before you sell OR selling before you buy. It is impossible to define the best method because every situation is different. Having a clear game plan for selling and buying can help clarify which route you should take, and ensure you don’t end up homeless! Once you have established your plan and know what you are looking for, seeking guidance from professionals and communicating with the bank can be great next steps. Remember that factors such as location, market conditions, season of the year, price point and so many others can all be areas of consideration prior to making the decision to buy or sell first. Happy house hunting!