Should I buy before I sell? That is the question that plagues many homeowners. The short answer is that it depends on the market and your financial situation. In a seller’s market, it is often better to buy first, but that has its own host of problems, especially if you are upgrading to a home that is going to have higher mortgage payments.  So, should you buy or sell first in this tough market?

Selling First

Selling first in a seller’s market is more beneficial to a buyer, since you already have cash in hand. Houses sell fast when real estate inventory is low. And, in many cases, you’ll have to compete with other buyers – that means that the seller may have more than your offer on their house, making the market competitive. If the seller doesn’t choose your offer, you’ll have to look at another house unless the pending sale falls through.

Having cash on hand from the sale of your house is often a huge benefit when the seller needs to choose from two or more offers. If you and another person makes the same offer, you’ll benefit by being able to close faster than a person who has to apply for a mortgage. Even if you have to apply for a mortgage, you may get through the process quicker since you have more money to put down on the new house.

Some people would rather not sell first because they don’t like the idea of not knowing where they are going next. To circumvent this, line up a short term rental and move the necessary furniture and items into the rental and put the rest in storage. With a place to go, you’ll be able to take your time looking for the perfect home. With cash in hand for the new house and a place to stay until you find the perfect house, you’ll be able to take your time looking for the perfect home.

Buying First

Generally, if the market is a buyer’s market, it’s better to buy first, and then sell your home. However, not many people are able to afford two mortgages. And, if you are in a position to buy first, you need to be able to find the house you want before you put your home on the market. Two things need to take place: You need to find the perfect home, and you need to know that you’ll get enough out of your current home to cover the existing mortgage and to make a profit after real estate agent commissions and closing costs.

To keep from depleting your savings, if your credit is great and you have enough equity on your home, you could apply for a home equity line of credit on your current home to cover the cost of purchasing a new home before you sell your current home. However, the take away to this is that banks are looking at the borrower’s income more closely since the foreclosure crisis.

Contact a real estate agent at On Point Carolinas Realty to learn what your house might sell for based on comparisons in the area. If you are able to get a fair price for your current home, then you are ready to look for the perfect home to move into.

Know the Market and Your Situation

To get the best benefit of buying or selling first, know the real estate market and your personal financial situation. Go with what best works for you, knowing that buying first or selling first is better depending on the market. Work out a solid plan before you take the first step of looking for a house or putting your house on the market. Contact a real estate agent at On Point Carolinas Realty to help you decide which path is best in the current market.