Selling- Buy First Or Sell First

This is a question that many sellers consider. Should I buy first? Should I sell first? There are 4 possible scenarios. Let’s cover each of them:

Buy First without contingency

Buying a home without a contingency of the sale of your current home is one of the main options that people choose. This allows you to go out there and just purchase another home, and then take the time to get your home on the market and sold. In a sellers market, this isn't usually a problem as houses tend to sell like hotcakes. In a buyer's market you need to be prepared to own two homes for a while, perhaps a few months. Also keep in mind that you will have to be qualified from the mortgage perspective to own two homes (if you have a mortgage on your current home). What this does give you is leverage on the purchase since it is non-contingent, and gives you some overlap so there is time to do updates and to move.


Buy First with contingency

Usually this scenario is because the mortgage company requires you to sell your current home in order to buy a new home. In a buyer's market this works out ok, and we would make the closing dates of the purchase and the sale, the same date. The basic premise is that you will have to have everything out of the house and in a moving truck so that you can close on the sale of your existing house in the morning, and purchase the new house in the afternoon. This way you'll have the proceeds from the sale to purchase. In a seller's market it doesn't work at all. This is because in a sellers market, sellers of the house you are trying to purchase probably won't accept a contingent offer because they have other offers they can accept instead. Why wouldn't a seller choose an offer that is non-contingent.


Sell First without contingency

With this option, we would put your home on the market and sell it. At the same time we could be looking for homes, but the purchase wouldn't be contingent on the sale. You may need to be prepared to find a place to stay for a few weeks, whether it is with family or friends, or a short-term rental. It's less complicated than any of the other scenarios, and sometimes we can time both closings to happen on the same day, but you can't count on it.


Sell First with contingency

Putting your house on the market with the phrase "subject to the seller finding a house of their choice" is sometimes done. In tight sellers markets where inventory is low, a buyer may not like the idea that they don't know when they can close on your house, because it may take a while for you to find a home. In this case, a buyer may make an offer, and while you are starting your search, they may still be looking at other homes as a backup plan. But it may also work out as buyers don't have as many options.

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7700 France Ave S #230
Edina, MN 55435
(952) 915-2252 (direct office)
(952) 884-8404 (office front desk)

Steven Hong, REALTOR
Team lead
Old Home Certified
(612) 990-9009

Each office independently owned and operated.  All information is deemed reliable but not guaranteed, and should be independently reviewed and verified. Equal opportunity housing. 

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