Do I Need to Sell My House Before Buying a New One?

Do I Need to Sell My House Before Buying a New One?

Moving into a new house is a big decision--and it comes with a number of other considerations that require quick decisions. When you're ready to move, one of the biggest decisions to make is whether or not you want to sell your current home before buying a new one. Do you need to sell your current home before buying a new one? Answering a few key questions will help you make a better decision for yourself and your family.

Related Blog: Buying vs. Renting a Home: Which is Better?

Check the Market

Is your neighborhood in the middle of a buyer's market or a seller's market? If it's a seller's market, you can afford to sell your current home when it's most convenient for you, but you may struggle to find the perfect house. If you're in the middle of a buyer's market, your house may sit on the market for a long time before it finally sells, so it may not be practical to start house hunting until you have an offer on your current property. Take a look at the market and talk with your realtor to make a decision that makes sense for you.

Evaluate Your Income

Can you afford the cost of paying the mortgage on your current house while paying the mortgage on a new one? While it would be nice if your house would sell quickly, you can't guarantee that it won't sit on the market for a few months before it finally sells--and if the combined financial burden of both houses is more than your income can handle, you can end up in a tight spot very quickly. Make sure you know what your current income can support before you make the decision to buy before you sell. There's a big difference between tightening your belt for a bit so that you can move into your new property sooner--or snag the house of your dreams--and watching your finances crumble due to a situation you weren't prepared to handle.

Consider Your Circumstances

Sometimes, your goal in moving is simply to get out of your current house for one in a better neighborhood, to change the size of your home based on a new family situation, or to move into a better school district. Other times, you need to move fast due to a new job or other important circumstances. In this case, you may need to evaluate whether or not you're ready to jump in and buy a house based on more than just whether the old property has sold. Will you need to pay rent until you're ready to buy? Will moving expenses from a temporary property in a new geographic area be more expensive than simply juggling house payments temporarily? Carefully evaluating your circumstances will help you make a better decision about the best time to buy.

Think Through Your Situation

If you sell your current home before you have a place to move, where will you stay in the meantime? Do you have storage lined up for your possessions? The option to temporarily rent a place to stay while you find a new house? What if you buy a property that needs some work before you're able to move in? Make sure that, if you sell your house before you have a new one, you're prepared to find a place for your family and your possessions in the meantime. You may also be able to negotiate a later move-out date with the new buyer, but keep in mind that not every buyer will leave you with this option--and you can't always afford to wait around for a new buyer.

There are a number of factors that go into whether you should buy a new property first or sell your old one. By carefully considering your situation and asking the right questions before you embark on this new journey, you can make the right decision for your family. Need help securing a mortgage on your new property? Contact us today to learn how we can help.

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