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The Matterer Team (310) 839-8484
Should You Buy or Sell First?
Homeowners often struggle with the dilemma of whether to buy another house before selling their current one, or to sell before purchasing their next home. There is no definite answer because personal circumstances can weigh heavily on the homeowner's decision. Both approaches have their advantages and disadvantages; herefore, homeowners should carefully evaluate their situration before making a decision.
Selling FirstWhen you sell first, you relieve the stress and financial burden of making a double mortgage payment. You also know your price range when looking to buy based on your net gain from the sale of your home. This allows you the opportunity to expore various housing options that are available. In a market where there is a surplus of homes and a scarcity of buyers, many people prefer to sell first. If you're planning to sell and buy at the same time, aim for a closing date for the sale of the current home after the closing date for the new home. That way you can stay in your old home until you are able to move. If your new home is not ready in time, you may ask the buyers for a short-term lease back after closing. On the downside of selling first, your new desired home may not be available causing you to resort to costly and inconvenient short-term living arrangements and a double move.
Buying FirstBuying first lets you know where you're going to live and when you can move. This works for homeowners who can carry two mortgages and also have the money for a down payment and closing costs. Those who don't have the cash but prefer to buy first often use their home equity as a "bridge" loan to supply the down payment for their next purchase. In this case, the downside of buying first is the risk of making two mortgage payments due to not selling right away, or having to compromise on your asking price in order to sell it quickly. Families with children that prefer a particular school district tend to buy first in order to start the school year in their new district. Local housing markets and conditions can influence the decision to buy first, such as when there's a shortage of homes for sale and a high demand from buyers, or when home prices are rising in market value.
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