In many ways, people who own homes and want to buy new ones have it easier than first-time home buyers. After all, they generally don’t need to scramble as much to scrape together decent down payments and additional cash for closing. They do face one serious dilemma though: whether to buy or sell first. If you’re torn between these two options, you’re not alone. With the right real estate agent by your side, you’ll have an easier time making this tricky decision. As an experienced GTA real estate agent, I understand the pluses and minuses of buying or selling first:
If you won’t qualify for an additional mortgage and don’t want to deal with the hassle of renting out your home, you’re going to want to sell first. The nice thing about doing this is that you can move from one mortgage to the next without having to deal with multiple payments. However, making the timing work out can be difficult. After selling your home, you’ll be under pressure to buy a new one quickly. You could make an offer on a house before selling yours, but it will have to be contingent on making the sale, which could make sellers pass over your offer in favor of one that has fewer strings attached. However, this option is most often less risky and less complicated.
Unless you have a very healthy income and excellent credit, the odds of being approved for a new mortgage while you have an existing one will be slim. You may be able to swing it if you rent out your house and have a signed lease, but lenders often have limits on how much of your rental income can be considered actual income. At any rate, it will be complicated.
Talk it Over
As you can see, there are pros and cons to buying a new house first, and there are pros and cons to selling your current home first. Which course of action is right for you also depends on whether we are in a “seller’s market” or a “buyer’s market.” I recommend talking this decision over with a talented and experienced real estate agent. I can help you get through the process as smoothly as possible. Call me at 647-287-8744 for more information.