Should I Sell My House Before Buying My Next One?

SHOULD I SELL MY HOUSE BEFORE BUYING MY NEXT ONE?

You've outgrown your current home.

Maybe you need another bedroom, a bigger yard, a different location or you're simply ready for something new.

There's just one problem:

You already own a house.

So which comes first?

Do you sell your current home and then buy?

Or find the next house first and worry about selling afterward?

There isn't one answer that works for everybody. The right strategy depends on your finances, timeline, current home and what's happening in the market.

OPTION 1: SELL FIRST, THEN BUY

Selling your current home first can give you something extremely valuable:

You know exactly what you're working with.

Once your home closes, you know how much money you're bringing from the sale and you're no longer carrying that mortgage.

That can make planning your next purchase easier.

The downside?

You need somewhere to live between selling and buying if the timing doesn't line up.

That could mean temporary housing, staying with family, negotiating possession terms or moving twice.

And nobody gets excited about moving twice.

OPTION 2: BUY FIRST, THEN SELL

Buying your next home first can make the physical move easier.

You get the new house, move your belongings and then prepare the old home for sale.

Sounds perfect.

But financially, it may be more complicated.

You need to determine whether you can qualify for the new mortgage while still owning your current property and whether you're comfortable potentially carrying two homes temporarily.

That's a conversation to have with your lender before we start shopping.

OPTION 3: TRY TO COORDINATE BOTH

Sometimes we can structure the transactions so your sale and purchase happen relatively close together.

That's usually what homeowners picture when they say:

“I want to sell this one and use the money to buy the next one.”

It can work.

But there are a lot of moving pieces.

Your buyer has a timeline.

Your seller has a timeline.

There may be lenders, inspectors, appraisers and title companies involved in both transactions.

This is where preparation becomes especially important.

YOUR CURRENT HOME'S EQUITY CAN CHANGE THE STRATEGY

Before deciding what comes first, I want to understand what your current property may be worth and approximately how much equity you have.

If you've built significant equity, those proceeds could play an important role in your next purchase.

That's why determining your potential sale price isn't just about listing your house.

It can help us build the buying strategy too.

DON'T START HOUSE HUNTING WITHOUT A PLAN FOR YOUR CURRENT HOUSE

This is one mistake I'd like to help you avoid.

You casually look online.

Then you find it.

The house.

Now suddenly we're trying to figure out financing, preparing your current house for sale, determining its value and deciding whether you can make an offer.

I'd rather answer those questions before the dream house appears.

Then, when the right property comes along, we're prepared to make a decision.

YOUR TIMELINE MATTERS

Maybe you're relocating.

Maybe you need more room before another school year.

Maybe you're downsizing and don't have a deadline at all.

Tell me what you're trying to accomplish.

Your timeline can influence whether selling first, buying first or coordinating both transactions makes the most sense.

SOMETIMES WAITING IS THE RIGHT MOVE

There's also another option people don't always consider:

Don't do either one yet.

If the numbers don't work, your finances aren't ready or the move would put you in an uncomfortable position, waiting may make sense.

I'd rather help you create a plan for six months from now than push you into two transactions that don't make financial sense.

LET'S PLAN BOTH SIDES OF THE MOVE

If you own a home in the St. Louis, St. Charles or surrounding area and you're thinking about moving, let's start by looking at the entire situation.

What might your current home sell for?

How much equity could you have available?

What do you want in the next house?

What monthly payment are you comfortable with?

And when would you ideally like to move?

Once we know those answers, we can build a strategy for selling one home and buying the next without making the process more complicated than it needs to be.

Micadez Favors, REALTOR® | MRP
EXIT Elite Realty

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