Ah the great dilemma; what makes the most sense when doing that move, buying first, or selling first?  Let's take a look at the risks and options of each approach and then discuss what strategy makes the most sense.

 

Buying A Home Before Selling a Home

 

Advantages:  

Be Crazy Like a Fox when

Switching Houses
  1. You'll get the house you want, no compromises
  2. You'll know exactly what you'll end up paying
  3. You can fix up your home more easily if you aren't living in it.

Disadvantages:

  1. You could get caught with two mortgages (Yikes!)
  2. You don't know what exactly your home will fetch on the market

Selling A Home Before Buying a Home

 

Advantages

  1. You know exactly what you'll have left over when the mortgage and fees are paid
  2. You won't get caught with two mortgages
  3. You can be more aggressive with your offer on timelines with your home sold.

Disadvantages

  1. The exact house you want may not be on the market
  2. It can be harder to get a home ready to show, and live in it, at the same time.
  3. You can't be exactly sure how much the new home will end up costing.

 

There, now that we have the pros and cons laid out, how does that solve our problem?  Well, the biggest issue is the two mortgages.  If you simply won't qualify to carry the old house and the new house, the decision is made for you right there:  Sell first. You'll be risking your deposits  if you can't sell your home fast enough.  But if you can carry both the houses, at least for a little while, which makes sense?  You have to follow your own sense of Risk-Tolerance, but basically I would recommend that if you have a home that is in demand, and likely to sell quickly if priced right, then you should buy first. In a good market, you can certainly consider buying first!  In a slow market there's more risk. If you have a home that is not in demand, then you should sell first, as a few months could quickly turn into something much longer. 

 

So how do I know if my home will sell quickly, and at what price?  Well, that's where it makes sense to bring in someone who can look at the data of similar homes in your area and let you know what "quick" is, and what an "attractive" price is.  Usually, that's your local real estate agent.  It's a big deal though, and a mistake can cost thousands (or ten's of thousands) and be stressful to boot, so make sure you've got your local expert well qualified.