When to buy? When to sell?
We often find that families expect to sell their home and buy their new home on the same day. Typically, that doesn't happen. So, consider a couple of things as you negotiate the sale of your home and the purchase of another. There are hot, cold and stable markets, and it can vary from one neighborhood to another.
Selling your home is a huge financial decision, and you can’t base it solely on national numbers or a single scenario. That’s why it’s important to know how much your home is worth today where you live. There are all sorts of home value estimates online, but they’re not known for accuracy. If you want to base your decision on real numbers, ask an experienced real estate agent to run a comparative market analysis (CMA) for you.
A CMA may sound complicated, but it’s simply a detailed report that compares homes near you that are either on the market or have sold in recent months. The goal is to find homes in your immediate area that are most like yours. This enables your real estate agent to more accurately predict what buyers will pay for your home during a current hot, cold or stable market.
- The busiest activity is typically during the spring-summer season.
- Often find more buyers than homes for sale.
- The bigger the gap between buyers and sellers, the hotter the market.
- The least activity in home sales is often noticed during the school season.
- Number of houses on the market out number the buyers.
- Buyers do have more homes to choose among, which increases the odds a buyer will find that perfect home.
Current market dynamics could play a large role in deciding whether buying first or selling first is the right move. It’s possible to make an offer on a new house contingent on the sale of an existing home. But often in a seller’s market, those kinds of contingencies may unlikely be accepted.
When you sell first...
- Get ahead of the game by knowing how your current home appraisal will affect the sale and determine the purchase power for your new home
- If you are planning to finance your new home, Get pre-approved for the loan.
- Avoid putting an offer on a new house until all the contingencies are removed on your current home
- If you have accepted an offer on your home, but have not found the right new home, consider looking for temporary housing
- If closing dates are not going to match, consider storing you household goods and rent furnished temporary housing.
When you buy first...
- If you find the perfect home first, then you may need to sell your current home second.
- Negotiate the contract contingent upon selling your house
- Schedule your closing date on your current home prior the closing date on your new home
- Make sure the offer on your new home reflects the current market
- Check the buyer’s credit history before you accept an offer on your house to avoid undesirable surprises.
- If you have closed on the new house and have not sold your old one, consider renting it out or taking it off the market until the market improves.