You need to leave your current home and move to a new town for work, or your family has outgrown your current residence in Spruce Grove, Stony Plain, Parkland County, the Edmonton region or elsewhere. Should you buy a new home before selling your current home, or is it better to sell the old one first? This is a complicated question with pros and cons on both sides of the issue.

Buy First

Pros:

• You can take your time to shop for a new home and make it ready for your occupancy.
• With no one waiting to move in to your current home, you’ll feel less pressure to move out and you’ll have more time to prepare for the move.
• The biggest advantage is the security of knowing you have somewhere to live, whether that is your current home or a new one.

Cons:

• It may be necessary to carry two mortgages for a time (assuming you can even get one on a new dwelling), as well as maintain two homes, and this could be problematic and costly.
• An Offer to Purchase a new home that is conditional on the sale of your current home may not be acceptable to many sellers because it ties up their property while everyone waits for your current home to sell. If it doesn’t sell, you then risk having the deal on your new home fall through.

Sell First

Pros:

• You’ll have money in the bank and will know how much you can spend on a new home.
• Your Offer to Purchase a new home would not need to be conditional on the sale of the old one, making your offer more likely to be accepted.

Cons:

• Selling your current home before buying another one could leave you homeless! You might find yourself quickly buying a less than satisfactory home just to put a roof over your head, or having to rent temporary accommodations until you can buy a suitable home (and having to move twice, or place your belongings in storage).
• If the sale of a new home goes through before you sell your old home, you may be short of cash for down payment and closing costs, and this could require “bridge financing”.

Ultimately, your family situation and especially your finances will determine which scenario will be your choice.

I often deal with clients in this situation and can usually help people find a workable solution. Call or text me at 780-910-9669, email me at barry@barryt.ca, or contact me here.

Tags: home buying, home selling, moving, Personal Finance