Pros and Cons: Selling Before Buying Your Next Home

Buying one home before selling the existing home is a delicate dance. So many things need to align just right to coordinate the house closing and move-out date for your existing home with the move-in date and closing date on your new home. And sometimes, as much as we try, it becomes necessary to coordinate some temporary housing options until your new home is ready. Today we’ll be discussing the advantages and drawbacks to selling before buying your next home.        

The Advantages and Drawbacks

There are a variety of reasons why you may find yourself in the position of owning two homes at the same time: a job transfer, a growing family, choosing to downsize, or relocating for school. With a bit of planning and the help of an experienced realtor, the transition between the two homes can go smoothly.  

Drawbacks to Buying Before Selling:

• There will be added expenses. When you buy before selling you most likely will also be carrying two mortgages, two sets of utilities—doubling most of your common household bills during this time.  
• It could be a financial challenge to secure a second mortgage plus a down payment. You may need to tap into your savings, secure an additional loan, or liquidate some assets to have enough funds to cover having two homes at the same time.

Advantages to Buying Before Selling:

• You won’t need to live in your home while it’s being shown to prospective buyers. While your listing agent will do their best to schedule open houses and showings on set dates, from time-to-time you may get a call that a buyer would like to visit your home later that same day. This means you and any pets will need to leave. It also means your home needs to be tidy and ready to show at a moment’s notice.
• You have a home to move into right away. Should your existing home take a bit longer to sell, you’ve already transitioned to your new home. You get connect to your new community right away and if you have children, they can get enrolled into school and activities to start making new friends.
• You can plan your move-in date around any holidays or time-off dates, around having family/friends joining you to lend a hand, and allow yourself as much time as you need to get ready for the move. This allows you the time to declutter, donate, or buy-new the items you want for your new home. You will need to move your items only once.
• You may decide that renting your existing home is the right choice for your situation. The monthly rental amount could coverage the existing mortgage and/or be used to offset the funds needed for the new home.

  Drawbacks to Selling Before Buying:

• It can be more disruptive to family life to have to move twice—getting the children settled and into routines in a temporary home before relocating to your new home, altering your job or school commute distance, etc.
• There’s no way to know an exact date when your existing home will sell. It could go fast or it may take several weeks or months.
• You may feel pressured and rushed to find a home fast. The housing market is consistently changing with the number of homes available and the types of homes. It could be tricky to quickly find a home in the community you want to live and with the size and style you want and need.
• You may need to move twice which increases your moving expenses, especially if you need to place items in storage for a bit until you find a home to purchase.

Advantages to Selling Before Buying:

• You could place a sales contingency in your contract. This allows you a window of time to find your new home and move in before having to vacant your existing home.
• You may qualify for a bridge loan or a HELOC (home equity line of credit) so you will know your budget and how much house you can comfortably afford when you do your house search. A bridge loan is a short-term loan intended to cover the gap between the new purchase and the selling of your existing home. A HELOC is a type of home equity line of credit that gives you a revolving credit line to use for large expenses or to consolidate higher-interest rate debt on other loans such as credit cards. This loan will need to be repaid like a home mortgage. Talk with lenders about your various loan options and be sure to discuss the rates, terms, and particulars for your situation.
• You can avoid holding two mortgages during the same time period. Knowing your existing home is sold, removes some concern and worry off your shoulders about how to juggle any financial strain.

An experienced realtor can help you look ahead to various steps in the process of selling your home and finding your next home with as little stress as possible. It’s my pleasure to help you smoothly navigate the transition between two homes. Schedule an appointment to get the conversation started. I’m here to help make your experience a good one.

Since 2004 Sara Lyn Nguyen continues to bring a wealth of knowledge and expertise about buying and selling real estate around the Houston area to those she serves. Sara is a multi-year award winning REALTOR® and relocation specialist where her clients trust her to have up-to-date information on the real estate market. She has been one of Gary Greene’s Multi-Million Dollar Top Producers, and citywide was the #2 Top Producing agent in 2020, #3 in 2021, and #2 in 2022. When it’s time to buy, sell, invest, or relocate speak with a trusted professional knowledgeable in the homes and neighborhoods of Fort Bend/Sugar Land and the surrounding region.