You’ve found the house.
It has the right number of bedrooms, the backyard you’ve been dreaming about and maybe even the garage you swore you absolutely needed.
You’re ready to make an offer.
There’s just one little problem.
You still own a house.
This is a conversation I have with homeowners all the time. Should you sell your current home first, or should you find the next house before putting yours on the market?
There isn’t one right answer for everyone, but in a buyer’s market, selling first can give you a pretty big advantage when it’s time to make an offer.
A House Sale Condition Isn’t Very Appealing to a Seller
You can make an offer conditional on selling your current home. It gives you some protection because you aren’t committing to own two houses if yours doesn’t sell.
But let’s look at that offer from the seller’s side.
They aren’t just accepting your offer. They’re also taking a chance on your house selling.
They may not know anything about your home. They don’t know if it’s already listed, whether it’s priced properly or how long it might take to sell.
They’re being asked to take their home off the market, or at least tie it up in some way, while they wait to see what happens with yours.
That uncertainty doesn’t make your offer very appealing.
If another buyer comes along without a house sale condition, the seller may prefer that offer, even if the price isn’t quite as high.
A clean offer can be worth a lot to a seller.
Selling First Lets You Be More Aggressive When You Buy
This is the part homeowners don’t always consider.
When your home is already sold, you know exactly where you stand. You know what it sold for, how much money you’ll have available and what closing date you’re working with.
Most importantly, you may be able to make an offer without a house sale condition.
That can give you more negotiating power.
You may be able to negotiate more aggressively on the price, ask for the closing date you want or negotiate appliances and other inclusions.
Instead of saying, “I’d like to buy your house, but first I need to sell mine,” you’re saying, “My house is sold, and I’m ready to move forward.”
That is a much stronger position.
But Isn’t It a Buyer’s Market?
Yes, but being in a buyer’s market doesn’t automatically make every buyer’s offer equally strong.
Buyers may have more homes to choose from and sellers may be more willing to negotiate, but the terms of your offer still matter.
Imagine a seller receives two offers at similar prices.
One buyer still needs to list and sell a home.
The other buyer’s home is already sold.
Which one feels safer?
The buyer whose house is sold can usually offer the seller more certainty. That certainty may give them more room to negotiate.
A buyer’s market creates opportunities, but you still need to be in a good position to take advantage of them.
You’ll Know What You Can Actually Spend
Before your home is sold, I can study recent comparable sales and give you a realistic idea of what it may be worth.
But an estimate is still an estimate.
Until your home sells, you don’t know the exact number.
Maybe it sells for more than expected and gives you a little extra breathing room. Maybe it sells for less than you hoped and changes how much you feel comfortable spending.
Once the sale is firm, you can stop guessing.
You’ll have real numbers to take to your mortgage professional, and together we can establish a price range that makes sense for you.
Just because you’re approved to spend a certain amount doesn’t mean you have to spend every penny of it. You still need to be comfortable with the mortgage payment, property taxes, utilities, insurance and the cost of actually living your life.
I’m a big fan of leaving room in the budget for groceries and the occasional vacation.
Now for the Obvious Question
What happens if you sell your house and can’t find another one?
This is the part that makes people nervous, and understandably so.
Selling first does not mean we put a sign on your lawn and hope everything works itself out.
We need a plan.
Before listing your home, we should talk about:
What you want to buy
Where you’re willing to live
How often those homes become available
Your realistic price range
How flexible you can be with your closing date
Whether you have somewhere temporary to stay if necessary
What you’re willing to compromise on and what you absolutely won’t
If you’re looking for a very specific house on one particular street, selling first may feel riskier.
If you have some flexibility with location, style or timing, it may be much easier.
We can also try to negotiate a longer closing date on your sale. That gives us more time to find your next home without turning the search into a full-blown panic.
The goal is to put you in a stronger financial position without leaving you feeling like you might be homeless.
Sometimes Buying First Does Make Sense
I’m not going to tell every homeowner that they must sell first.
Buying first may make sense if you can comfortably carry both properties, the kind of home you want rarely comes up for sale or your mortgage professional confirms that the financing works.
It may also make sense if your current home is likely to attract buyers quickly and you’re comfortable accepting the risk.
Selling first may make more sense if you:
Need the money from your sale to purchase
Want to know exactly what your budget is
Don’t want the stress of carrying two homes
Want to avoid including a house sale condition
Want more negotiating power when you buy
Have some flexibility with timing
It depends on your home, your finances, what you want to buy and how much uncertainty lets you sleep at night.
Make the Plan Before You Fall in Love With a House
The worst time to figure this out is when you’re standing in the kitchen of a house you’ve already mentally moved into.
Suddenly, your furniture is arranged, you know where the Christmas tree is going and you’re willing to agree to almost anything to make it yours.
That’s when emotion starts making the decisions.
I would much rather have this conversation before we start seriously looking.
We can talk about what your current home may sell for, how long it could take, what you want to buy and whether selling or buying first makes the most sense.
Your mortgage professional can help us understand the financial side, and your lawyer can advise you about the legal details.
Then, when the right house comes along, you’re ready.
Should You Sell Before Buying in Sarnia-Lambton?
If you need to sell your current home before purchasing your next one, the order matters.
Selling first may help you avoid a house sale condition, give you certainty about your budget and put you in a much stronger position when it’s time to negotiate.
That doesn’t mean it’s automatically the right choice for everyone. It means we should look at your complete situation and create a plan before making either move.
If you’re thinking about buying and selling in Sarnia or anywhere in Sarnia-Lambton, let’s talk about it.
There’s no pressure and no obligation. We can look at what your current home may be worth, what you’re hoping to buy and which strategy makes the most sense for you.
Your Friend in Real Estate,
Kelly Sitter, Broker
EXIT Realty Community
Serving Sarnia-Lambton and the surrounding communities
www.kellysitter.com
