Selling Your Home and Buying Another? Here’s Where to Start

by Jason Dove

If you’re thinking about moving, there’s a good chance you’re asking yourself a big question:

Should I buy my next home first, or sell my current home first?

There’s no one-size-fits-all answer. The right strategy depends on your finances, how much equity you have, the type of home you’re buying, and what’s happening in your local market.

For many homeowners, though, selling first can make the next step easier and more financially predictable. Here’s why—and what you should consider before making a move.

1. Selling First Can Help You Avoid Two Mortgage Payments

Buying before selling can be appealing. You get to find your next home without feeling rushed, and you don’t have to worry about moving twice.

The downside? You could temporarily own two homes.

Depending on how quickly your current home sells, that could mean carrying two mortgage payments, along with utilities, insurance, maintenance and other expenses.

Selling first eliminates much of that uncertainty. Once your current home closes, you’ll have a much clearer picture of your budget for the next one.

2. You’ll Know How Much Equity You Have to Work With

One of the biggest advantages of selling first is knowing exactly what you’re working with financially.

Your home equity is essentially the difference between your home’s market value and what you still owe on your mortgage.

That equity may become a significant part of your next move. Depending on your situation, proceeds from the sale could help fund your next down payment, pay closing costs or give you more flexibility when choosing your next home.

Before you start shopping, it’s worth having a conversation about what your current home could realistically sell for and what you could expect to walk away with after the sale.

3. Your Next Offer May Be Stronger

Once your current home is sold, you can make an offer on your next home without having to make it contingent on the sale of another property.

That can make a meaningful difference.

From a seller’s perspective, an offer from someone who has already sold their home can feel more straightforward and less uncertain than one that depends on another property selling first.

Depending on the circumstances, that could give you more negotiating power when it comes to price, repairs, closing dates or other terms.

What If You Need to Buy Before You Sell?

Selling first isn’t always practical.

Maybe you’ve found the perfect home before yours is ready to go on the market. Maybe you have somewhere specific you need to move. Or maybe you have enough financial flexibility to purchase before selling.

In those situations, buying first may still make sense.

The important thing is to understand the potential risks and have a plan before moving forward. Your agent and lender can help you determine what you can comfortably afford and whether there are options for bridging the gap between the two transactions.

You May Have More Options Than You Think

If you’re trying to coordinate two real estate transactions at once, the goal isn’t simply to decide whether you should buy or sell first.

It’s to create a plan that makes the transition as smooth as possible.

Depending on your situation, strategies such as:

Negotiating a flexible closing date
Requesting a rent-back or post-closing occupancy agreement
Coordinating the sale and purchase timelines
Using your home equity strategically
Making your next purchase contingent on the sale of your current home

may help bridge the gap between the two transactions.

The best strategy will look different for every homeowner.

Before You List or Start House Hunting, Make a Plan

If you know you want to move but aren’t sure where to start, don’t feel like you have to figure it all out on your own.

Before putting your home on the market—or seriously shopping for the next one—talk with a real estate professional about your timeline, your current home’s value, your equity and what you’re hoping to buy next.

At Dove Realty, we can help you look at the entire picture and build a plan around your goals.