You're currently a homeowner, who wants to build a new home.

It could be a home you fell in love with and have to have or maybe it's a builder's model home or you've just outgrown your current home.  In any case, you need to hit the brakes and look closely at your options.

Can you afford to buy a new home without your current home being sold?  If so, would money be tight if it takes longer than 3 - 6 months to sell your current home?  Can you handle the financial pressure?

Many home builders don't want your current home sale as a contingency to buy the new home, but there are builders out there, who will now take a home sale contingency.  You need to see if that's an option.

When the real estate market was HOT, many consumers felt that they could write an offer on a new home and they weren't worried about the sale of their current home, because they often sold fairly quickly.  Now with being in a real estate market, where the length of time it takes to sell is much longer, you really need to determine where you are financially before you end up with two mortgage payments every month.

As a first step, I would highly recommend having a Mortgage Plan done by a reputable mortgage consultant, who will help you look at all of your options, so that you can determine what your next step should be.  This will help you decide your level of risk tolerance towards having two mortgage payments.

Next, you need to figure out how marketable your current home is in regards to pricing and condition.  More on this in another post.

If you decide to sell current home before you buy another one, you may need to find temporary housing, which can be stressful in the short-term.  But then you won't be rushed into just finding another home to move into and not really be in love with it.  If you select a new home only from what's currently on the market and it's not really what you want, are you going to happy?  Probably not!  I always ask my clients in this situation, do you have any family nearby where you can move in with until you find your new home?  About 25% of the time, they say 'Yes'.

Waiting until you've begun to build your new home adds unneeded pressure to see your current home.  You can't negotiate with strength, if you are under pressure or the buyer knows it too.  In some cases, you may need to make a double move, which isn't something that's desirable to do, but necessary.  A double move allows you to sell your current home at favorable terms to you.  In other cases, it's possible to negotiate with the buyer of your current home for extra time to live there after the closing and you "rent back" from them.

The thing you don't want to have happen right now is to buy a new home with your current home for sale, sitting empty, especially if there's a lot of other homes competing with yours on the market.

By completing a Mortgage Plan and having determined what you need to do to get your current home sold, you'll be in a much better situation with a lot less stress involved for everyone.

If you have any comments or questions about this post, I'd love to hear from you.

Cincinnati Home Selling Tip: Buy Or Sell First?
by Dan Weis, Real Estate Consultant since 1985
Cincinnati Ohio Real Estate