03.11.2022 | Buyer Resources

To Buy First or Sell First–THAT is the Question

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If you’re planning on making a real estate move in the near future, chances are, you have asked yourself this question a thousand times. Maybe you’re waxing poetic, Shakespeare-style, or maybe you’re starting to pull your hair out from all the reasons you should do one over the other. 

Not knowing whether to buy or sell first can result in your moving plans grinding to an absolute halt. You might feel totally paralyzed by indecision and not sure which is the right route for you. 

Well, never fear! Homeplicity is here to share some insights and detangle the nest of confusion that many homeowners in your position are currently experiencing. 

Here’s a closer look at whether you should buy first or sell first. 

Before we get into the nitty-gritty, have you subscribed to our YouTube Channel? We’re talking about topics you care about and giving solid advice to keep you informed on what’s going on in Toronto real estate. Subscribe here!

First, Let’s Look at Some Contributing Factors

There’s no one-size-fits-all answer to this question, this isn’t a Brandy Melville store. Buying first or selling first depends on a bunch of factors that are unique in every sense of the word. Here are a few things you need to consider:

The Market

In a Seller’s Market, there are more buyers looking for homes than there are homes for sale. This increases the demand for housing and means, generally speaking, that houses will sell for more money and faster than they would in a Buyer’s Market. 

A Buyer’s Market is when there are more properties for sale than there are buyers looking, which often results in homes selling for less than the listing price, and staying on the market for longer. 

Unless you’ve been actively avoiding the news these days (no judgment here!), you probably know that we are currently in one of the most competitive Seller’s Markets in history. Housing inventory is at a record low and the number of motivated buyers ready to purchase is at a record high thanks to the low-interest rates that came about as a result of the pandemic.

What’s happening in the market is a huge deciding factor to whether or not you should buy or sell first. More on that later. 

Your Goals

On a scale of one to ten, how picky are you? If you have super specific ideas about the type of home you want to live in, the area you want to be in, and the amount of money you want to pay, you might consider buying first because, we’re sorry to tell you, but your hunt will probably take a little longer. 

Depending on your unique goals and what you want from your house, the inventory just might not be there. And you might need to wait it out a bit before finding the one.

Risk Tolerance 

Does the idea of having to move all your belongings into a storage unit and hunker down with your in-laws make you squirm a little bit inside? For some people, the idea of having to live with relatives, move into an investment property, rent, or shack up at their cottage for a few months is no big deal. But for others, it could be extremely disruptive and just not nice. 

If you are averse to taking risks, it might be better for you to buy first. That way, you know your new home will be ready for you. 

Financing

This is a big one for a lot of people. In most cases, buyers need bridge financing from the sale of their current home to facilitate closing on a second home. On the other hand, selling first means you might need to pay extra costs like mortgage penalties, extra moving costs, costs associated with putting your belongings in storage, and more.

At Homeplicity, we make buying a house fun and our team of buying specialists can help you find the home you’ve been waiting for. Learn more about our buying process here. 

So, When Should I Sell First? 

Generally speaking, it’s a good idea to sell first in a Buyer’s Market, but we probably won’t see market conditions like that for a hot minute. Selling first is also a good idea for anyone who needs bridge financing to close on a new property. 

Selling first is also a good idea for people who aren’t super picky about the next home they are buying or if there are a lot of homes available with the features they are looking for. 

Although to minimize some of the risk involved with selling first, you could always plan for a longer closing to give yourself more time to find a new home–food for thought! 

And When Should I Buy First? 

In a Seller’s Market, we are almost never worried about a property selling. However, finding a home to buy can take time. If you are risk-averse and don’t want to take any chances of needing to move in with your parents for a period of time, buying first is probably the best option for you. 

If you are seriously looking for the perfect house for you and your family, buying first is also a good option no matter what kind of market we are currently in. Finding a that needle in a haystack can take time. 

Our Take

I believe that the buying and selling process should happen simultaneously. 

Now, I’m not trying to say this to blow your mind. But if you really think about it. It makes sense. Especially in today’s fast-paced market. 
Once you decide to sell your home, you should already be looking at listings at your price point. It will give you an idea of what’s out there, what’s coming, and will give you confidence in your choices. 

Then, if a property comes up that meets your criteria, you can act quickly. Alternatively, if a great offer on your home comes in, you can accept it without worrying too much about what will happen afterward. 

When things are done simultaneously, you have more flexibility, and the risk of something going wrong is much less. You can make decisions based on what’s best for you, not because you’re forced into making them. 

Are you feeling a bit better about making the decision? At the end of the day, working with an experienced real estate agent can help eliminate all the stress that might be weighing you down. 

Give me a call at 647-973-8392 for more home buying and selling advice, I’m always happy to talk real estate! You can also stay up to date with all the latest and greatest real estate market news by signing up for our monthly newsletter right here! 

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