What Happens if i Buy a House Before Selling My Own?

Are you living in Kitchener Waterloo & feeling conflicted about selling your house or buying one first? In this video below, I will talk about the pros & cons of both scenarios, so that you can make a decision that’s right for you & wave that stress goodbye! There are a few different clauses you can build into an offer to help ease the mind for both a Seller or Buyer. At the end of the video, I’ll touch on one in specific to help put your mind at ease as the Buyer & maybe even give you a leg up, if you’ve found a home you love, but haven’t yet sold yours.

This is one of the MOST asked questions in real estate & one that I really wish I had a crystal ball for to answer. When considering if you should BUY or SELL first, there is one very important thing to consider here & that is the MARKET. Depending on the current market in KW & what your expectations are, the end result can look different for everyone. So, let’s talk about what the pros & cons are if you choose to buy before you sell & vice versa.

THE PROS - Selling Before Buying

  • If you sell your home before you buy, you will know exactly what you have to work with for buying your next home because you will have received a firm offer in hand. If by chance your house sold for MORE than expected, than your buying power should increase along with that, allowing you to look for purchase options that you may not have previously considered. That could be either a bigger home, or a home located in a more expensive neighbourhood.

  • Additionally, in a fast moving market, if you present an offer to a Seller & you don’t need to add a condition on the sale of your current house, this can help to give you a leg up & will be more appealing to that Seller. Sellers can feel more confident in accepting your offer if they know your house is sold firm, than they would with someone who is unable to give them that firm guarantee. The less worry for the Seller, means the less worry for you too!

THE CONS - Selling Before Buying

  • If you’ve sold your home & you need to buy another, this isn’t a bad position to be in. And if you’ve spent some time already browsing active listings, you may have found some that you really like, but you’ve got to be prepared that it may not always be so easy. In a slow moving market, you should have a little more time & control over your home search & the offers you present, but if inventory is low at the time, you may not be able to find something that you like. While, on the other hand, in a fast moving market where you absolutely need to buy, you can run into multiple offer scenarios that could drag on this process for longer than you had hoped.

  • If you do decide to sell first, understanding the current market that you’re in, can also help you figure out the best closing date for the sale of your house, that you can hopefully match up with your new purchase.

Now let’s go into reverse & talk about buying before you sell.

THE PROS - Buying Before Selling

  • If you’ve been thinking about making that move for a while, you’ve got your finances in order & you’ve linked up with a great mortgage advisor to get you that pre- approval that you are confident with, this strategy could be for you. For example, if we’re in a hot market, & that dream home that checks all the boxes suddenly appears before your eyes, you’ve got to act FAST. Because you’ve gotten all your ducks in a row in anticipation of this possibility, it could translate into a buy before sell scenario for you.

  • OR say for example, your heart is set on one particular neighbourhood or type of home that doesn’t see a ton of inventory in a year (maybe in a spot like Hidden Valley in Kitchener), you may want to hold off on the sale of your home until something pops up OR be open to looking in other areas that could still get you what you want at a similar price point to get things moving a bit faster.

  • There are things you can do to prepare you to get your house up on the market as quickly as possible after your purchase, should this situation arise. (Check out my YouTube Video called “How to Go From Zero to Listing in 30 Days or Less in Kitchener-Waterloo” for a Week by Week simplified breakdown to make this a stress-free transition for you & your family.)

THE CONS - Buying Before Selling

  • Firstly, you won’t really know for certain what you have to work with in terms of affordability for that next house. Your Realtor should have provided you with what’s called a Comparative Market Analysis to give you an idea of what your home should sell for in the current market, based on recent sales of similar style homes in your area. But again, depending on the market, the price it actually sells for might not meet your expectations, & if you’ve bought already, you could be in a pickle here. This is why it’s always important to have a contingency in place, if you need to come up with more money to make that down payment in a pinch. Just because you’re approved for up to a certain amount, doesn’t necessarily mean that you should max out at that number.

  • Lastly, there’s always that question of “what if my house doesn’t sell fast enough?”. Doing your due diligence before making any big moves can help to alleviate these worrisome thoughts. For example, speak to your mortgage advisor about what’s called “bridge financing”, to see if this is something you can qualify for. SO, say, if you buy a house first & then sell yours, but the closing dates don’t line up, you may be able to bridge that gap without having to stress.

OKAY, so it’s clear by now that the buying and selling journey can look different for everyone & that means there may be other factors to consider in addition that I didn’t touch on here. The important things to take away when considering to buy or sell first are, that it depends on the market, it depends on what your expectations are & most importantly, it depends on what you are comfortable with. I myself have been in this scenario, where it ended up working out seamlessly because the circumstances lined up, but this isn’t always the case. That’s why, looking after your best interests should always be top priority! 

Make sure to check out my full YouTube Video to hear more about that special clause I was referring to earlier.

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