Is it possible to buy a home before selling your current one? While it’s a common question for homebuyers, there are both advantages and drawbacks to consider. Let’s break down the pros and cons of buying before selling, so you can make an informed decision.
Pros:
Control Over Timing: Buying first gives you the opportunity to wait for the best market conditions to sell your current home. You can maximize your sale price without feeling rushed to sell quickly.
Cons:
Cash Flow Challenges: Without the funds from selling your current home, you may struggle to cover the down payment and other costs associated with purchasing your new home.
Risk of Financial Discrepancies: If your old home takes longer to sell than expected, or if the timing doesn’t align with the closing of your new home, you could find yourself juggling two properties for longer than anticipated. Additionally, if your home sells for less than expected, you could fall short of the money needed to complete your new purchase. On the flip side, if it sells for more, you might regret missing out on a better (but more expensive) home.
Bridge financing is often a viable option if you’re facing this situation, but it’s typically only available if you have firm offers on both the house you’re purchasing and the one you’re selling. Keep in mind, bridge financing comes at a cost and should be considered carefully.