Sell First or Buy First?
For most homeowners, selling a home is more than just getting rid of an asset or trying to increase cash flow. Just like my wife and I, selling a home involves buying a new one.
During our last home selling experience, we put an offer on a house before we even had our home listed to sell. Most of everyone we talked to said this was not recommended in this type of market. The response was typical of, “Get a contract on your house first and then put an offer on the house you find and intend to buy…” When we had a contract on the house we intended to purchase, we had some security. We knew that we only needed to sell our house and then close on the other one. The problem was that the situation became more stressful as the market time increased on our home and we began to wonder when the seller’s would cancel the contingency. We asked for three extensions, and the seller’s agreed. Each time we wondered when they would just say “No” and we would have to make that decision whether to move forward with the possibility of two homes or the chance that someone would buy our home before that happened. In the end, we cancelled the contract and got our earnest money back. All in all, it was really stressful as we had one deal in the mix and we’re hoping for another deal in the sale of our home.
This time, however, we are selling first and then buying. We’re going to list our home, get a contract (hopefully soon), and then look for and place an offer on our next home. We figure that this way, we don’t have to worry about buying a home until we know our home is under contract. The problem I forsee with this type of scenario is that we’ll get an offer, agree to it, but the buyer’s will want to close in 30 days. Great, but what if we don’t find “that home” in that time limit? What do we do? Do we settle for something that we “kind of like” and forever wonder what other home we could have purchased? Or, is this simply being a bit neurotic?
I guess there is no perfect scenario, but I have a hunch that if our home does not sell for an extended period of time, we’ll be a bit less stressed out as we dont have to worry about a home we already have a contract on.
Technorati Tags: Buying a Home, Selling a Home