Four Options

This is a question that comes up all the time: Should I buy first, or should I sell first?
When it comes to buying first or selling first, this one decision can have huge implications. Let's cover the basics. There are 4 possible scenarios:
1. Buying first without the contingency of selling your house.
2. Buying contingent on the sale of your house.
3. Selling without it being contingent on buying a home
4. Selling contingent on you finding a home.

Buy First without contingency

Buying a home without a contingency of the sale of your current home is one of the main options that people choose. This allows you to go out there and just purchase another home, and then take the time to get your home on the market and sold. There is less pressure with the sale of your home, but you could end up owning two homes for a little while. In a sellers market, though, this isn't usually a problem as houses tend to sell like hotcakes. In a buyer's market you need to be prepared to own two homes for a while, perhaps a few months. Also keep in mind that you will have to be qualified from the mortgage perspective to own two homes (if you have a mortgage on your current home). What this does give you is leverage on the purchase since it is non-contingent, overlap so there is time to move, but some extra stress that comes with worrying about whether your house will sell or not.

Buy First with contingency

Usually this scenario is because the mortgage company requires you to sell in order to buy. In a buyer's market this works out ok, but in a seller's market it doesn't work at all. This is because the sellers of the house you are trying to purchase probably won't accept a contingent offer because they have other offers they can accept instead. Why wouldn't a seller choose an offer that is non-contingent. But with this scenario, we would make the closing dates of the purchase and the sale, the same date. The basic premise is that you will have to have everything out of the house and in a moving truck so that you can close on the sale of your existing house in the morning, and purchase the new house in the afternoon. This way you'll have the proceeds from the sale to purchase.

Sell First without contingency

This is just a straight sale of a house. Some people choose this method as it is the simplest of both selling and buying. But there may be a few weeks where you'll need to find a place to stay, whether it is with family or friends, or a short-term rental. It's less complicated than any of the other scenarios, and sometimes we can time both closings to happen on the same day. But you can't count on it.

Sell First with contingency

Putting your house on the market with the phrase "subject to the seller finding a house of their choice" is sometimes done. In tight markets (i.e. seller's markets) where inventory is low, a buyer may not like the idea that they don't know when they can close on your house. This is because it may take a while for you to find a home. In this case, a buyer may make an offer, and while you are starting your search, they may still be looking at other homes as a backup plan. You may not be able to purchase a home in the timeline the buyer wants (or needs). They may end up walking away due to the contingency and we would need to find another buyer that is willing to wait.

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