There are certainly several things to consider when buying and selling a house at the same time.

The process of buying a house can be difficult and stressful. Tons of research is required in terms of the location you want to live in as well as the local real estate market. Then you’ll need to go house hunting in order to find properties that are for sale, not to mention find houses that you actually like. It can be an overwhelming process.

The same can be said about selling the house you’re currently living in. You’ll need to make repairs, invest in upgrades to help boost its value, stage your home, hold open houses and more. Like buying a home, selling a home can prove to be quite a challenge. With this in mind, you’re probably wondering how the heck you’re going to manage to do both. Do you sell your current home first or should you focus on buying a home first? The thing is, there’s no right answer. It all depends on your particular situation. 

Very few home buyers can afford to qualify for two mortgages at the same time.  If you currently own a home and want to know whether you should sell your before you buy your new home. There are homeowners who can afford to buy first before they sell their current homes, but many home buyers will need the proceeds from the sale of their homes to purchase a new home.  Yet most homeowners will not qualify for two mortgage loans at the same time due to debt to income ratios

Let’s go over some of the things that you need to consider before choosing one or the other.

Buying a new house before selling your old house

One of the main reasons that home buyers choose to buy a new house before selling their current home is because they don’t want to end up selling their current property and then finding themselves without a roof over their head. Inventory in the real estate market is somewhat low at the moment, and there is more competition among buyers due to the fact that mortgage rates are still favorable. This makes it more difficult to find a house that you like without competing with another buyer — which would drive up the price.

Once you sell your house, you could end up waiting months, even years before you find a new house to buy. You would end up having to put the majority of your possessions in storage while living in an apartment. You won’t have to worry about this if you focus on buying a house first. This way, you can move in immediately and then focus on selling your old house – and if it doesn’t sell, then you can always just rent it out instead so that you’re at least getting something out of it.

Selling your old house before buying a new house

While buying a new house before selling your old house may seem risky, you may not be able to afford doing so. What happens if you find the house of your dreams, take out a mortgage on it and then find that you are having trouble selling your old house? You’re going to end up having to pay mortgages on two separate properties as well as all the costs associated with owning two homes (property taxes, homeowners insurance, repairs, regular home maintenance, etc.). Sure, you could rent the old house out, but this may not provide you with enough secondary income to cover all of those costs, and you’ll have to deal with the responsibility of maintaining that old house.

CLICK HERE TO TRY OUR FREE ONLINE HOME VALUATION TOOL

One of the biggest advantages of selling before buying your new home is that it allows you to bring more funds to the table.  Most home buyers can't afford to have the down payment for a new home before they sell their current home. If you place an offer on a new purchase offer with a larger down payment, it can give you better negotiation power.

If you cannot sell your home first before you buy, your purchase offer may need to contain a subject that you need to sell your home first in order for the purchase to go forward and close. A subject to sale offer makes the sellers wonder how long your home will take to sell, something they have no control over. They may demand a time clause which means if they get another offer you would be expected to go ahead with the sale with even if your home has not sold or you could choose to back out and walk away. The chances are that sellers will most likely not accept your purchase offer unless they are super desperate or the home has been on the market for quite of length of time.

Selling a home may take weeks or many months.  Once your home is sold, it will take anywhere between 30 to 60 days if not longer to close on your home.  If you buy before you sell your home, you will not only have two mortgage payments but you will also need to have the stress of owning a vacant home.  Insuring a vacant home can be quite costly and depending on the area where the home is at, vandalism could be a major problem.

If you don’t have the means to own two homes at the same time, then you should strongly consider selling your old house first before you buy a new house. Yes, you may end up having to put your things in storage and rent an apartment until you find a new house to buy. But this is preferable (financially speaking) to having to deal with the costs of owning two homes.

If you have a home under contract to buy and you are on a timeline to sell, the pressure is on that you need to sell your home and whatever demand a potential home buyer to your home asks, you will have no choice but to cave in to those demands.  However, if you are selling your home before buying a new home, that pressure is off and you can play hard ball because you are in no time constraints.  You can take your time and make counter offers without the pressure to accept a low ball offer so you can meet the closing date of your new home purchase.

As you can see, there are pros and cons to both buying before selling and selling before buying. The best option for you depends a great deal on your financial situation, so make sure that you know what you can afford to do before you make a choice.

As always get a great local Realtor that can help you with making these huge decisions.

© http://ballennetwork.com/buying-and-selling-a-house-at-the-same-time/