You have decided it is time to sell your home and move to a new place that better fits your current lifestyle. Listing a house for sale and buying a home at the same time is something that takes extensive planning. Here are three key considerations to keep in mind:
1. Get to know the market
Consider the market in which you are buying and selling. Is it a seller’s or a buyer’s market? Work with a local realtor who knows your neighbourhood to understand what you can realistically expect when you put your house up for sale. Your realtor will help you determine the right price for your home. This is key if you want to sell fast: an overpriced house will likely stay on the market longer.
Talk to your realtor about the new property you are looking for. Is it in the same or a different neighbourhood? Which amenities do you want to have nearby? How much are you willing to pay for your new home? An experienced realtor will help you set the right expectations for both your current and new home.
2. Look at the financial options
Although the ideal scenario would be to move into your new dream home and put your old house up for sale once you have dealt with the move, most people cannot afford to pay two mortgages at once. Selling first will make it easier to get a mortgage, but it also means you will find yourself without a roof over your head when you’re in between properties. Talk with your realtor and your mortgage advisor to decide upfront how you want to approach this.
You may want to consider renting a place for a while, to give you as much time as you need to find a new home. Or you could negotiate a rent-back agreement with the buyers. That way you will become a temporary tenant of the house you just sold. This will give you a certain amount of extra time to stay in the house after closing and gives you the chance to look for a new place without having to carry two mortgages at the same time.
If you decide to buy a new home first and then sell, you could negotiate a bridge loan with the bank. These short-term loans bridge the gap between two different closing dates by allowing you to tap into the equity of your current home as a down payment for your new property, while waiting for the sale of your existing home to close.
3. Don’t feel rushed
Don’t let stress force you to make a rushed decision, whether it is to accept a less than desirable offer on your home or to make on offer on a place that may not be a perfect fit for you.
Don’t feel like you have to compromise on things that are important to you just because you need to find a new home quickly. Conversely, don’t accept a bid that you feel is too low just because your finances are strained by two mortgages. If you have considered in advance how you want to bridge the gap between selling your old home and buying your new house, you’re less likely to compromise.