If buying a home in the Atlanta area is on the agenda but you’re also trying to sell, you might be pondering the classic question: Is it best to buy first or sell first?
The challenging part of the whole homebuying and selling process is that sometimes timing is out of your hands. If you or your spouse got a new job, if you just got married or divorced or if financial obstacles stand in the way, sometimes the order of events is beyond your control.
But when you do have a choice, buying a home (and the whole process in general) is typically easier if you sell your existing house first. Some of the factors you’ll need to consider include the following:
- The market: If you’re in a seller’s market where houses are getting snatched up as soon as the for sale sign gets posted, it makes sense to focus on selling first. The natural progression of the process would have you selling your house, packing up then moving into a new house. If you end up selling before you’ve found your new home, you have several options. First, you could ask the buyer to let you rent the house back from them for a month or two while you find the perfect house to buy. If that doesn’t pan out, you could always spend a few weeks or months in a rental house, hotel or family member’s house.
- Your mortgage: Unless you’re very wealthy, it’s difficult to obtain two mortgages simultaneously. If you want to try to find your new house while you’re selling, you could make an offer contingent on the sale of your house. But in a strong seller’s market — or in any market — if the seller gets an offer with funding in place, your offer will be quickly discarded. If it’s a house that you’re utterly in love with, you’ll be full of regret.
- Your finances: For most of us, the most significant challenge of buying first and selling second is having two mortgage payments on your hands. Not only will you not know how long it will take to get your house sold, but you’ll have all the insurance, utility, repair and maintenance costs, times two. Also, if you sell first, you’ll know exactly how much money you have to work with for a down payment on your new house. Or, think about this scenario: you buy your new house, and your first house sits on the market for months. You get an offer, only it’s about $25,000 less that what you’d like to accept. But, with the pressure of two mortgages, you could very likely feel forced to accept the offer. If you had more time to wait it out, and especially if home prices were on the rise, you might have a better chance of getting that extra $25,000.
If you have some control over the matter, always sell your first house before buying a new one.
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