You’re ready for a different home but should you buy first or sell first?
For many move-up homeowners, this is one of the biggest questions to answer before making a move. Much of your buying power may be tied up in the home you already own, so the decision isn’t always as simple as finding your next house.
Should you sell first and risk having nowhere to go? Or buy first and potentially carry two homes?
There’s no one-size-fits-all answer. The best strategy depends on your finances, your local market, your timeline, and how comfortable you are with risk.
Here are the options to consider.
Option 1: Sell Your Current Home First
Selling first gives you the clearest financial picture.
Once your sale closes, you’ll know exactly how much equity you have available for your next down payment and other moving expenses. It can also make your offer on your next home stronger because you aren’t relying on the sale of another property to complete the purchase.
The biggest drawback? Timing.
You could sell your current home before finding the right next home. That could mean temporary housing, moving twice, or storing your belongings.
One potential solution is negotiating a rent-back arrangement, sometimes called a seller occupancy agreement. This can allow you to remain in your home for an agreed-upon period after closing while you search for your next property.
I am happy to go more in depth about rent back agreements, so if needed please reach out and we can have that conversation via email or phone.
Of course, availability and terms vary depending on the buyer, lender, insurer, and local requirements, so these arrangements need to be carefully structured.
Option 2: Buy Your Next Home First
Buying first can give you more control over your move.
You can find the right property, move on your own timeline, and then prepare your existing home for sale after you’ve moved out. For some homeowners, that flexibility is worth a lot.
But there’s an important question to answer first:
Can you comfortably carry two homes if your current property takes longer to sell than expected?
That could mean temporarily managing two mortgage payments, utility bills, insurance premiums, taxes, and maintenance costs. Before choosing this strategy, talk with your lender and look at the numbers under a less-than-perfect scenario—not just the best-case scenario.
Financing May Help Bridge the Gap
Depending on your financial situation and local lending options, there may be ways to access funds before your current home sells.
Potential options can include:
1) Bridge financing
2) A home equity line of credit (HELOC)
3) Other financing strategies that account for the anticipated sale of your current home
These tools can provide additional flexibility, but they can also come with interest, fees, qualification requirements, and repayment risks.
Before relying on one of these strategies, make sure you understand the full cost and what happens if your home takes longer to sell than expected. A qualified lender can help you evaluate your options.
What About a Home-Sale Contingency?
Another strategy is making your purchase offer contingent on selling your current home.
A home-sale contingency can reduce the risk of owning two properties at once, but it can also make your offer less attractive to a seller, particularly in a competitive market where another buyer may be able to purchase without that condition.
That doesn’t necessarily mean a contingency is off the table. It means the strategy needs to make sense for the current market and be structured thoughtfully.
Start With Your Risk Tolerance
So, which option is right for you?
Selling first may be the better fit if financial certainty and minimizing risk are your top priorities.
Buying first may make sense if you have strong financial reserves, flexible financing, and a limited supply of homes in the area where you want to move.
The right answer depends on more than just the market. Your available equity, monthly budget, financing options, desired timeline, and comfort with uncertainty all matter.
Before You Make Your Move, Make a Plan
If you’re thinking about selling your current home and buying your next one, you don’t have to figure out the timing alone.
At City RE, we can help you look at the big picture from your estimated equity and potential sale timeline to your next-home search and backup plan.
The goal isn’t simply to buy or sell first. It’s to create a move-up strategy that makes sense for you.
Thinking about making a move? Let’s map out your options and see what makes sense to you! Shoot us a text at 608.471.8566.
Talk soon!
-Katie