As a homebuyer, you may be facing an awkward situation, whether you should buy a new house before selling your current house, or sell your current house first and then buy a new house. There’s no easy answer, as it depends on many factors like your financial situation, the housing market, and your preferences . In this article, we’ll explain the advantages and disadvantages of each option, and give you some advice to help you decide what you should consider before finalizing any decision.

Buying First: Pros and Cons

If you buy a new home before selling your current one, you may enjoy some advantages, such as:

• Buying a new home before selling the current one can provide several advantages, such as more time to find the perfect house, better negotiating power when making deals, and only having to move once. 
• Additionally, if prices go up in between buying and selling a home there is potential for financial gain.
• This eliminates the need for temporary housing and storage, saving time and money.
• Moving only once is a convenient option for those looking to buy or sell their home.

However, there are also some drawbacks to buying first, such as:

• The risk of having two mortgages if the old home cannot be sold quickly or at a desirable price.
• The stress and financial burden associated with carrying two homes, including property taxes, insurance, utilities and maintenance costs.
• Homeowners considering a move should be aware of the potential risks associated with real estate market volatility.
• A financial plan and access to bridge loan or HELOC financing is necessary in order to cover down payment and closing costs for new home purchases.

Selling First: Pros and Cons

If you sell your current home before buying a new one, you may also have some advantages, such as:

• The clarity of your budget, you will know exactly how much money you will get from the house’s sale, and can plan accordingly.
• Cash buyers can be advantageous as they are able to make stronger offers and close deals faster than other buyers.
• The peace of mind that comes with not having two mortgages at once can be beneficial when looking for the right home.
• Having flexibility in negotiating closing dates and terms to one’s advantage is a benefit of selling first.

However, there are also some drawbacks to selling first, such as:

• Potential buyers should consider the risk of not finding a suitable home in time, which could lead to having to rent or store their belongings temporarily.
• The possibility of a rising market should also be taken into account, as it may increase the prices of desired homes and reduce buying power.
• Potential for a buyer’s market, which may lower the prices of an old home and reduce profits. 
• It is important to have a backup plan in case unexpected delays or challenges arise during the buying process.

Tips for Buying or Selling a Home

Whether you choose to buy first or sell first, there are some tips that can help you navigate the complex process of buying or selling a home. Here are some of them:

• Work with a reputable real estate agent to gain local market insights, negotiate on behalf of the buyer or seller, and guide them through necessary paperwork and legal requirements.
• Get pre-approved for a mortgage to understand how much can be afforded and demonstrate seriousness as either a buyer or seller.
• Research the prices, features, and locations of homes to find the best value. 
• Have a contingency plan in case things do not go as planned.
• Consider having a backup financing source or being open to compromise on some preferences. 
• Communicate clearly and transparently with agents, lenders, or lawyers involved in the process.