Many homeowners in Montreal wonder if it’s best to buy their future home or sell their current home first. The answer will always depend on the homeowners risk tolerance level, financial capabilities and any other applicable personal circumstances. Moving can be stressful, so getting this right is a crucial piece of the puzzle.
Here are some different circumstances which may affect the decision to buy or sell first:
Scenario #1: You are in a seller’s market – Answer: Buy first
In a seller’s market, there are more buyers than sellers. This makes it easier to sell and harder to buy. In a seller’s market, you want to buy a home first, as finding the right home will take more effort.
Scenario #2: You are in a buyer’s market – Answer: Sell first
For the same reasons as scenario #1 in reverse. In a buyer’s market it will be easier to buy a new home. Therefore, it will be harder to sell your current home.
Scenario #3: The market allows for you to buy a home conditional on the sale of your current home – Answer: Buy and sell at the same time
This is more typically seen in a buyer’s market and allows you to buy with more ease. As previously mentioned, sellers in a buyer’s market have difficulty selling their home. Therefore, they are more willing to accept offers with this less than favorable condition.
Scenario #4: You can afford to own two properties – Answer: Buy first
If you are able to buy your next home without selling your current one, you can renovate and move in a more relaxed fashion. Doing so will allow you to prepare your next home and sell your current home with a solid plan to maximize the selling price.
Scenario #5: You have a transitional home available – Answer: Sell first
This may be of interest if scenario #3 and #4 are unavailable to you. In addition, you are able to live somewhere in between the sale and purchase of your new home. Don’t forget to get your pre-approval from a mortgage broker! Doing so will lock in your interest rate and protect you from unwanted surprises (like interest rate hikes).
Your realtor is a wonderful resource to learn about your current market conditions.
Every situation is different. One or more of these scenarios may apply to you and we would be thrilled to help you plan the best strategy for your next move.