Buy First or Sell First?
Friday Dec 11th, 2020
If you are a homeowner and you decide to enter the market, you’re faced with a difficult question: Especially if you’ve never sold your home before.
Do you buy your next home before selling? Or do you sell your current home before buying?
We reached out to our RE/MAX Influencers—a panel consisting of RE/MAX Sales Associates from throughout Canada—to find out their opinion on whether homeowners who are re-entering the market should buy first or sell first.
It All Depends
The majority of our RE/MAX Influencers agreed that each situation is unique, and several factors need to be looked at to determine the answer of that question. For example: What are the current market conditions? And are you financially capable of carrying two properties with ease?
“It absolutely depends on the market situation,” says Justus Smith, RE/MAX Crown Real Estate (East). “If the client is selling in a hot seller’s market, then they would likely want to find their next home first and buy it. However, if they are selling in a buyer’s market, it’s better to get their property sold before venturing out to purchase another home.”
Pros of Buying First
By buying first, homeowners are less rushed to find the right home, so they can spend time making sure the new house fits as many of their needs as possible.
“The ideal situation is to purchase a home and then sell your current property,” says Sarah Leib, RE/MAX River City.
“Buying without having to sell first allows buyers to find the right home at their own pace,” adds Shauna Bailey, RE/MAX Crown Real Estate North.
Although buying first has some advantages, this situation isn’t financially feasible for everyone. There may be a possibility to add in a sale of home condition to the offer; however, competing offers without that condition will likely be more desirable.
“Buyers should consult with their lender to discuss the possibility to arrange interim financing; therefore, enabling them to make an offer without this condition—provided they qualify—with the intention of ultimately selling their current home once they confirm the new purchase,” says Glen Darough, RE/MAX RHC Realty.
Pros of Selling First
Many aren’t able to afford the cost of carrying two properties, and trying to do so may cause significant stress.
“The risk of having to discount your home to create a quick sale just isn’t a pleasant experience,” says Eric Steinbach, RE/MAX Kelowna. “(Clients) can negotiate a better purchase price being strong on finance.”
“It really depends how comfortable my clients are to have the possibility to have to bridge finance or carry two mortgages. I always suggest to sell first, but there are a lot of buyers out there who are scared they won’t find what they are looking for,” says Elio Parente, RE/MAX City Realty.