Should I buy first, or sell first? I don’t know what to do. A commonly asked question without a correct answer. Many people find themselves in this classic real estate predicament most associated with “which came first, the chicken or the egg?” Unfortunately, there is no right answer that covers the board. Circumstances, finances, and many other variables play a role in determining which best case scenario is for you.

If you buy first, you may find yourself in the quandary of owning two homes, paying two mortgages, and having to pay all of the other expenses that come along with home ownership. With any luck, your current home will sell quickly, and the problem is then solved. However, there are no guarantees that accompany this scenario. If your house does not sell quickly, you may be forced to close on your new home, and then you have become the proud owner of 2 homes, that you cannot afford. If you sell first, a whole different realm of possibilities opens up. In this scenario, you sell quickly and luck into finding an ideal home, and closing on it in a reasonable fashion. Otherwise, you sell your home, and are stuck with having to put your belongings in storage, and find yourself shacking up with friends, or family. Either scenario presents its own risks and uncertainties. There are too many conditions involved in determining a correct answer for the “Do I buy first, or sell first” question.

Generally speaking, there is less pressure, and less risk, involved in selling your current home first. Put your house on the market, while at the same time, be out house hunting. As your house is showing, you can be compiling a list of potential contenders in a new home. And speaking in financial terms, the majority of home buyers need the equity, and profit, of their current home in order to purchase their new home. Many people need to sell their current home in order to qualify for a loan, leaving them with no choice, but to sell first. Not all people, especially in the eyes of the bank, are in a financial position to carry two mortgages.

While your current home is on the market, you can feel free to write a contingency offer on any home you find while house hunting. But, bear in mind that you will be paying a premium with a contingency offer. That is, if the seller even gives it any thought. Also, you may deem it necessary to take less for your current home in an effort to get it sold more quickly. So, be cautious. You can have comfort in knowing that you do have an opportunity to write a contract if the perfect house arises, but don’t lose sight of your current home’s value.

Or...do I buy first? With the economy still on the rebound, and interest rates still low, many people are entertaining the thought of running out and buying first. The market, like the economy, is also in recovery mode, meaning home prices are still somewhat lower than they traditionally would be. The housing market is moving very quickly because of this, and dictates that homebuyers are more focused on buying, than on selling. Motivated buyers are being recommended to obtain a mortgage commitment that is not contingent upon selling their current home, in order to dive into this fast-paced buyer’s market. Homebuyers are realizing that even in a strong market, the selling end of a transaction can drag on, potentially leaving them in the dust when it comes to landing a good deal on the purchase of a new home.

Either way, the choice of buying, or selling first, is 100% circumstantial, and financially dependent on each individual. Circumstances may have you in a position where you have to sell first in order to obtain the money to buy. Or, they may have you in a position where you have to buy because of a job relocation.

In today’s market, there are benefits and perks to each version. Buy first, and plunge into the hot buyer’s market. Or, sell first, and have the relief of knowing that you will not be trapped into the potential payment of two mortgages. For most people, the stress level is much lower when selling their current home first, and buying second. Nonetheless, it is a decision only you can make, given your current circumstances and financial position. There is no universal right answer to “Should I buy, or sell first?”

Masha Halpern, Broker, CLHMS, GRI
Keller Williams Realty
Masha@MashaHalpern.com
919-414-0337  

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Masha Halpern and The Smart Move Team is your ultimate real estate resource for Chapel Hill, Durham, Carrboro and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Masha is a certified member of The Luxury Home Marketing Institute, participates in its annual Leaders in Luxury Conference, and works with The Institute’s thousands of members worldwide to share information about current listings.

Masha is also a certified member of Keller Williams Luxury International and is also a member of Cyber Stars International – Top Realtors Using Technology – a group dedicated to taking the best and latest technological advances and applying them to real estate advertising and marketing for her clients in all price points. Masha Halpern can be contacted for a private consultation by calling 919-414-0337 or by visiting www.TheSmartMoveTeam.com.

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