Do I Buy First or Sell First?
This question has come up for many years. It seems to come up several times a week, because timing is not always simple. For those people who have the luxury of cash in the bank and are more concerned about the convenience of transition, I strongly suggest looking around and taking your time. Buying a home in this market is not always easy, especially if you have specific needs and a specific location in mind. The thought of selling your home and having nowhere to move to is anxiety-provoking. So, if you have the luxury of cash in hand, always simplify the process by buying first and selling your house after.
Unfortunately, most people do not have the cash to do that. They need to either borrow money or have a bridge loan. A bridge loan is not always easy, though. If you are not an all-cash buyer, you need to qualify and have enough income to support your existing mortgage, your new mortgage and the bridge loan. That is a lot of responsibility to carry. If you do not plan to carry a mortgage on the new purchase and choose to pay cash, you still need to qualify for the existing mortgage and the bridge loan, unless you have no mortgage at all. Then, the task would simply be to qualify for the bridge for the amount needed. There is also timing to consider, because getting loans these days is not as easy as it used to be. There is a lot of paperwork involved and a lot of supporting documentation for the qualifying process.
If, on the other hand, you are not in a position to buy first, then you need to sell your house first. The good news is that at least you can hold out for your price and not be in a rush. Also, you will have cash in hand and be a very strong buyer. The bad news is that you might not find a new house in the meantime, and then you'd have to rent an apartment or another home until you purchased a new one. That's called a double move, and it's expensive. There are moving expenses, and there might be a commitment to a yearlong lease. What would you do if you signed a yearlong lease and then found your perfect home in the next two months?
For some people, buying first is a simple process, and for those people, it is quite nice. The average person has to sell first. Try to make the timing work with either a long escrow or a leaseback after close of escrow, so you don't have to load up the moving van twice. Be sure to think this through carefully and talk to a reputable realtor. I would be happy to talk to you about this at any time.
For more information, please call Ron Wynn at 310-963-9944, or email him at Ron@RonWynn.com. To find out more about Ron and read his past columns, please visit the Creators Syndicate webpage at www.creators.com.Copyright 2021 Creators Syndicate, Inc.