Should I buy my next home first, or should I sell my current home before I buy my new one? This question has plagued would-be home buyers from taking action towards buying their next home for decades. 

Here’s How Most Home Sellers Think When They Want to Purchase a New Home

They want to buy a new home, to secure that new home so no one else can have it, and know exactly what they’re getting before they put their current home on the market. This way, they know that they’ve got a house to move into, know exactly what they’re getting, and can play it as fast or as slow as they want to. These poor people don’t want to be left homeless! 

They don’t want to sell their home and not know what the other side looks like for them. 

This Is How the Process Plays Out

The home buyer locates the home that they want. 

They write an offer on that home, and in that offer, they put a condition that says something along the lines of “this offer is conditional to the sale of my current property. If my current property doesn’t sell, I don’t buy your home.” 

They also want to include due diligence conditions in the offer on this new home; things like conducting a home inspection, sending the purchase information and their personal financial details to the bank, and all the other critical details that go into purchasing a home. 

99 times out of 100, the seller of that home is going to insert a clause into that contract as well, saying something effectively along the lines of “You, the buyer, have about 24 or 48 hours to remove all of your conditions if another offer that we want to accept comes in. Failure to remove all of your conditions will result is us punting you out of spot.” 

They will let you do your homework on the home.

They will let you get your home up for sale.

But if somebody else comes along, they have the ability to work with that other offer. 

Now, depending on the market conditions, you as a would-be home buyer and eventual home seller, need to decide what the best way to proceed is. 

For us to really effectively break this down, there are three things that you and I need to agree on. These three things are really the only possible outcomes that could happen if you choose to buy a home before you sell. 

1. The Home You Want to Buy Sits

This means the home that you want to buy sits on the market for sale with no other buyer coming up to the plate, resulting in you eventually getting to buy it once your current home sells.

2. The Home You Are Trying to Sell Sits

You can’t get your home sold, which won’t allow you to buy this new home. No matter how bad you want this new home, failure to sell your current home is required to make everything come together. No sale of your current home, no purchase of the next one.

3. The Home You Want to Buy Sells to Someone Else

The home you want to buy is attractive, and other buyers think so, too. In the time it has taken you to discover this new home, get your current home prepared and on the market, plus wait for an acceptable offer, another Buyer has decided to make an offer on the home you want to buy.

The Seller of the home decides they would prefer to work with a Buyer who doesn’t have the same financial burdens as you (i.e., waiting for a home to sell), so they decide to work with the new Buyer over you.

Let’s Break Each of These Scenarios down a Little Further

The Home You Want to Buy Sits, Your Home Sells, and Your Plan Is a Success.

Obviously, this is ideal, and if this is the way that it works out, your plan came to fruition. This is exactly what you wanted. Wouldn’t it be great if life always worked out the way we intended it to?

So what could go wrong?

The Home You Are Trying to Sell Sits and Doesn’t Sell

Depending on the market conditions or the price you choose to advertise your home for sale at, your home could be for sale for a very short period, or it could be for sale for a fairly long period. 

When you make an offer on a home prior to selling, you are locking in today’s price on that particular home while you are trying to sell your home.

Your home will now be subject to whatever market conditions are current at the time. The home you are buying has its price locked in, so it doesn’t experience the same market fluctuations.

If you fail to price your home appropriately or the market conditions change, your home could sit. As a home seller, you need to start making a few decisions at this point if you are committed to making both sales go through.

Now, while this is all happening, you have also likely spent some money. 

Most home buyers will perform a home inspection on a home they’d like to purchase, or will require an appraisal of the property. Expenses like these could run you a thousand dollars or more. 

The fairy tale ending to this scenario is that your home eventually sells, and the plan works out. You’ve now bought the home, and this is wonderful.

But what happens if your home doesn’t sell? Perhaps you aren’t able to get the price for your home that you need to make the purchase happen. 

If your home doesn’t sell right away and you find yourself needing to adjust to the market conditions, you’re starting to create a bigger and bigger void between the price committed to on the home you want to buy versus the ultimate sale price of the home you’re selling. 

Now, you’ve spent some money in the process and have created a bigger gap between prices, making it even more challenging to make your plans come true.

This Brings Us to the Third Scenario: the Home Sells to Somebody Else

Because of the 48-hour clause or a 24-hour clause in the offer benefiting the Seller mentioned earlier, if another buyer is to come along on the home that you are trying to purchase, the Seller can effectively kick you out of spot to work with the new offer.

This is where most would-be home buyers have made a decision without all the facts. They really don’t have the security of buying that new home that they think you do. In fact, that’s why a lot of people get into these buy-before-you-sell scenarios because they think they actually are securing a home prior to putting their home on the market, which isn’t true. 

All it means is that it helps them feel better, thinking that they have some security in the home that they think they’re going to buy. However, it’s really not theirs until they sell their current home. 

If that home sells to somebody else, they’ve spent money, time, and energy. Worst of all, though, they’ve really got their hopes up on a home that they’re not going to get. 

So, when needing to sell and then buy, how do you play this scenario out?

Does It Really Make Sense to Try and Buy It Before You Sell?

• We know that it creates a false sense of security.
• We know it costs money that may be spent unnecessarily.
• We know that the home could sell at anytime to someone else.
• We know that your home may not sell or be worth what you hope it is.
• We know that you have locked in a price on the new home that won’t fluctuate as you potentially struggle to sell your current home.

So what do you think? What is the best way to proceed?

There Is a Better Way of Doing It

Consider putting your home on the market first. The home you want to buy will still be there, or not, but now you have saved yourself many of the woes mentioned earlier.

This allows you to attract offers, know what price your current home will sell for, and you could build in some contingencies into that offer to make sure you’re protected; you don’t want to find yourself both homeless or buying a home that you’re not in love with. 

This is exactly why we designed a PDF called The Crazy Market Playbook for anyone wanting to buy a new home and sell their existing one in Surrey BC, or really anywhere in the Lower Mainland, for that matter.

This playbook offers 4 strategies to make sure that you can find the home and secure the one that you want without being homeless after you sell your home. It also covers how to protect yourself to ensure you are buying the perfect home long before you have ever sold your current one.

To grab a copy of the Crazy Market Playbook, you can get a copy at the link below, and we will send it right to your email, along with a few helpful tips on how to make your home-buying plans come true in the most secure and sensible fashion available.

GET IT HERE

I hope this helps you in your search for the next home, and if you need a great team of REALTORS® to help you along the way, the Germyn Group is ready to help. Book a time to speak with our team about your plans today.

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