In an ideal world you’d sell your current property at exactly the same time as buying your next one. Unfortunately, this rarely happens in real world. Even though there certainly are people who could afford to pay two mortgages (at least for a while), majority of us would be a little worried about having to do so. Therefore, most of us have to choose either one option or the other. However, what to do first? Sell or buy?
Many people agree that this strategy makes more sense if you’re in a hot seller’s market with bidding wars common over prime real estate. However, there are other factors that make people consider buying a house before selling the old one. One such thing is consistently rising home prices in Toronto’s real estate market. Buying a new property in a rising market means you can always get rid of your existing property at a potentially higher price down the road. However, if prices start to fall, buyers could end up trying to finance two homes which are steadily losing value.
There are also buyers with specific needs such as living on a specific street or walking distance to a specific service. Sometimes buyers fall in love with a property because of its uniqueness or attractive asking price. Yes, that’s when emotions kick in and get in the way of you making a wise financial decision.
However, if you buy another property and are not able to sell your current home quickly enough, you could be faced with owning and making payments on two homes. Plus, you might have to come up with the cash for a down payment. Since you don’t know the selling price of your current home, purchasing a house could be quite a gamble. You may even be forced to take a lower price for your property so you can sell in time for closing.
There are many variables you have to consider when making such major financial decisions. Are we in a seller’s market or buyer’s market? How quickly can I sell my house? How can I make sure my closing dates coincide? Is there a possibility that I will be stuck with two houses? How much money can I count on from the sale of my house?
We Have 48 years of combined real estate experience to help you navigate successfully through the myriad of complexities that can arise when buying and selling real estate. We would be happy to meet with you to find customized solutions for your real estate needs.