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Should I Sell First or Buy First?

The sell first/buy first dilemma has been raging for years. It's like the chicken and the egg. The fear of having two houses can be just about as daunting as the fear of not having a house at all. If this is the situation you find yourself facing...fear not, you do have options!

Ask yourself the following questions:

• Am I willing to move twice? If you put your home on the market and it sells right away, are you willing to move into temporary housing until you find a home to buy?
  
• Are my needs for my next house very specific? When it comes time for you to look for a home, is that home going to be difficult to find or are your needs flexible enough that there are lots of homes that might work for you?
  
• Can I qualify for "bridge" financing (the type of loan that allows you to purchase your next home before your old home is sold)? Even if you qualify, are you comfortable taking out that kind of loan? How long could you comfortably make the payments?

Buying First

Imagine...you have found the home of your dreams. You still have to sell your current home, but you just cannot let the opportunity slip past. Hopefully you can put your home on the market, and it will sell right away to a buyer who can accommodate your timeline. But if for some reason that does not happen, let's look at the pros and cons.

PRO: You do not have to worry about your home being sold out from underneath you...and that counts for a lot!

CONS: You have to:

• (a) convince the seller to accept an offer contingent on the sale of your home. That is sometimes a tough sell. Not only that, but that type of contingency usually comes with a timeline. If for some reason you cannot meet that timeline, you may have to take out bridge financing or lose the house.
  
• (b) or write the offer so that it is not contingent on the sale of your home. If you choose that route, you have to be ready, willing, and able to commit to bridge financing.
  
• (c) face the stress of needing to sell your home in a limited amount of time. It's hard to think about accepting an offer for less than you hoped just because you need to meet a certain date.

Selling First

You put your home on the market and start looking for a new home. A buyer comes along and decides to purchase your home. Hopefully, you can find a home, write an offer, and close on your new home with a timeline that corresponds to the sale of your current home. But if, for some reason that does not happen, let's look at the pros and cons. PRO: You do not have to worry about having two house payments!

CONS: You have to:

• (a) convince the buyer to sign a purchase agreement that is contingent on you finding a home of your choice. As in the example above, that is sometimes a tough sell. Also as in the above example, that type of contingency will come with a timeline. If for some reason you cannot find a satisfactory home, you will have to decide to move twice or lose the sale of your home.
  
• (b) or accept the offer that is not contingent on finding a home of your choice. If you choose that option, you have to be ready, willing, and able to move somewhere (an apartment, a friend's house, etc.) if the possession date comes and you do not have a new home yet.
  
• (c) face the stress of needing to find a home in a limited amount of time. You don't want to have to compromise about your next house because you need to meet a certain date.

In Practice.

Most of the time the process of selling your existing home and buying your new home is quite painless. If you price your home correctly and make sure it is in great showing condition, finding a buyer for your current home is not a major obstacle. Before you begin, however, take a good look at your priorities and tolerance for risk to determine how you will proceed.

Factors like market conditions also have a role to play, and can vary significantly between areas and price ranges. We live and work everyday in the Washtenaw County real estate market. We're familiar with lots of homes in lots of price ranges. We can help you evaluate your situation to make a good decision for you. Here are a few more tips:

• If you decide to sell your home first, take a look at some homes before your home sells. You may find something you like, and that home you like may still be available when your home sells.
  
• If you decide to buy a home first, get a market analysis and select a real estate agent to help you right away. When you make an offer, it is helpful to have your home ready to go on the market immediately if necessary.

The items mentioned above are certainly not an exhaustive list of issues, but a good starting point. If you're considering selling a home, we would love an opportunity to earn your trust and your business.

Please use our form to request a free market analysis. Give us a call, or send us an email with any questions. If you've decided to look for a home first, please use our Seattle real estate search including communities all over the Seattle, WA metro area.