When there is a need to replace an old home, the first question most homeowners in this situation ask is which should come first and sell the old home or buy a new one? Sometimes, consulting a real estate agent on this matter does not help because he or she may be more concerned about his or her gain. So how do you know the better option for you?
ADVANTAGES OF SELLING FIRST BEFORE BUYING
Each option has its pros and cons. But you are more at a disadvantage if you will buy first. Selling your old home before buying proves to be a better option due to the following reasons:
- Less tension – If you will sell the old house first, you can use the proceeds of the sale to buy a new one. You can even profit from this scheme. But if you will buy first, there will be a need to sell the old house immediately. Because you are under pressure, you will have the tendency to accept an offer even if it is lower than your original price range. Selling first before buying allows you to maximize your gain.
- Buyers can identify desperate property sellers – Buyers can easily sense if you are desperate to sell the house. It is normal for buyers to haggle a lower price, but they will lower their bids even more if they knew that you can fall for it. If you will sell first, there is no rush. Buying a property can always wait. In fact, you can always change your mind about it. If buyers will realize that you are after the right price as opposed to the fastest way to sale, they are more likely to make larger bids.
- You are in a more comfortable position – If you sell first, you can try to state in the contract that you are selling the property subject to you finding and purchasing a new home first. This means that you will push through with the sales process only when you are able to get yourself a new place to live. Or if this would not work, you can also ask for a contingency period of about three weeks or more to give you time to search for a new property. That if you cannot find one, you are able to opt-out of your agreement at any time. You might never be in a comfortable position like this if you will buy a property first.
FACTORS TO CONSIDER BEFORE BUYING OR SELLING
To make the most appropriate decision, it is necessary to learn about the factors to consider before buying or selling a home. Which is better between buying and selling first is not only a matter of whether or not you can afford to buy right away. Do not forget to evaluate these two:
- Present condition of the property market – If the interest rate is low, and many properties are offered at bargain prices, it might be a good idea to buy first. But if it is the other way around, you might want to sell first.
- Urgency of relocation – If you are selling the old house because you need to transfer to a new location immediately, you cannot wait around and sell before buying a conveniently located one. Employees who are sent to a new branch, or entrepreneurs planning to start a business somewhere, may need to urgently move to a new home. But if there is no time pressure, selling now and buying later is still advised.
It is generally a much better idea to sell your property first and then buy later to avoid any circumstances that will put you under pressure or even in hot water. Selling a property is already stressful, and it will be much more if you need to sell as soon as possible. Your goal should be to sell your old place at the highest price possible, and to find a new one for less. However, this may not be possible if you will opt to sell first.