Buy First or Sell First?
There is no easy answer, and whether you’re a homeowner or a Realtor you may have a different opinion on the matter. Currently the North Vancouver Real Estate market is balanced, which complicates the matter further as the situation does not favor either buyer or seller. It’s important to weigh both options, which come with their own pros and cons, and then make the decision that is right for you and your family.
SELL FIRST. To many this is the logical path to take, if you are looking to make a move you aren’t going anywhere until your home sells. On the other hand, if you do enter into a firm contract of purchase and sale and then cannot find a suitable home to buy, you could find yourself in a sticky situation. Some homeowners might have friends or family that they can move in with temporarily, or might be comfortable with the notion of renting – this depends entirely on the individuals and their circumstances.
The advantage to selling first is that your offer is so much stronger than a subject-to-sale offer. If you come to the table with a stronger offer, especially in a multiple bid scenario, you’re in a much better position to negotiate. Being able to present an offer with fewer subjects, from the Seller’s point of view, means you’re in a better position to complete on the deal. In a market that favours buyers you will need to have a strong to beat out competing buyers, and you will be at an advantage to be able to close a deal more quickly.
BUY FIRST. The obvious advantage of buying first is having time to browse homes more thoroughly and take your time with the process. You can hold off listing your home until you’ve come across a home that makes sense for you to sell in the first place. Once you’ve identified that perfect North Vancouver home with five bedrooms, a two-car garage and the fenced yard, you can make an offer that is subject-to-sale, which is inherently a weaker offer, and price your home on the market at an aggressive price to encourage a faster sale. The challenge with this approach is the potential for your home to sit idle on the market without a sale, and due to the nature of the subject-to-sale offer, your offer can be ‘bumped’ by other buyers.
So, when Buying first you have a weaker offer and thus a greater chance of losing out on the home, but you do not end up in a situation where your home is now sold and you have to move in with friends or rent. Conversely, when Selling first you have the confidence of having a stronger offer, the ability to close the deal faster, and yet there exists the possibility that you may not find the right home in time.
That being said, depending on your financial situation you may very well be in a position to buy a new home without selling your existing home, and thus the decision should be fairly obvious. In a situation where your selling your spacious Lynn Valley house to downsize into a two-bedroom Lower Lonsdale condo, you may have enough equity to simply buy the condo outright. There are some financing options such as bridge-lending, which as the name suggests means bridging the mortgage between the two properties. However, this option isn’t right for everyone and it’s important to receive advice from your lender to ensure you want to go this route.
The obvious conclusion is that it entirely depends on your circumstances as to why you’re moving, what other options you have at your disposal, and with which approach you’re most comfortable. Each has positives and negatives associated with it, otherwise there would be no debate and every client would act in the same manner when buying and selling at the same time.
When that perfect home hits the market, the one that matches everything on your wish list, which position would you rather find yourself in?