It is the classic “chicken or egg” conundrum. Which comes first? Do you buy or sell first?
In strong seller market conditions, such as we’re experiencing today, people tend to favour buying first, since they don’t know how long it will take them to find a new home. (We are currently at a 16-year low, in terms of inventory of properties for sale.)
In any market, though, people take a leap of faith by selling before buying, because they don’t know where they will end up, or when. However, once they sell, they know exactly how much they have in their pockets, to spend on their next home. They can also take advantage of market conditions that are skewed in their favour and then buy as the market opens up. Traditionally, the market opens up in late spring: May and June are very active months in the real estate business as many houses and condos come to market. The risk inherent in selling first is in not being able to find a new home to close on before the current home closes, and then having to rent temporary accommodation in the interim. People who sell before they buy may also not be motivated to buy unless they can sell for their target price.
Others need the security of knowing where they are going to move to first. For these types of people, peace of mind is in having a fixed address to go to. The risk is financial — particularly if the market shifts and the client finds himself having to carry mortgages on two properties. Clients are well advised to speak with their banker or mortgage broker first, about bridge financing, in the event that such financing is required, to carry the mortgages on two homes.
So the question to ask yourself is: Do you need an assured financial outcome or a secured address? It is a personal decision that only you can make.
Life circumstances frequently dictate which direction a client will take. Busy families with school-aged children, and persons in their later years tend to favour having a fixed address to go to, to avoid the turmoil of potentially having to move into temporary accommodation. People more financially cautious tend to sell first.
Members of the Trilogy Team work with every client individually, to map out a plan that meets that client’s particular risk tolerance and preferences. And we offer strength in numbers: When you engage Trilogy, you have the advantage of the combined expertise of the whole team, to put together a strategy that meets your needs, whether it be selling first or buying first.