When a hermit crab decides it's time for a new home, it scopes out a new shell before vacating its current accommodation.
But for homeowners, the process is not so easy.
Whether you buy a new home before selling your current one - or the other way around - the choice of what to do first comes down to which option makes you the most comfortable.
Both have pros and cons, and here are some to consider:
Sell first
- When you know what your current home has sold for you can zero in on exactly what you can afford in your next one.
- Because you already know the conditions of your own home's sale, such as the closing date, you can make informed offers.
- The downside: If you can't get possession of your new house before leaving your current one, or even worse, can't find what you're looking for, you'll need temporary housing. Can you afford a short-term rental, and what will you do with your furniture while you're waiting?
Buy first
- If you've found a home with unbelievable features in a great neighborhood at an awesome price, the pressure is on. You really want this dream home, so in this case, you may have to buy before selling.
- If the local real estate market is hot, you might feel safer buying first. It's probably a safe bet your home will sell fast, unless it's out of step with its neighbors; if it's a fixer, or if it's the best home in the neighborhood, it may languish or sell below asking
- The downside: If you buy first and your home does languish, the worst case scenario is you're stuck with double mortgage payments.
And double stress.
Some families handle risk better than others. What kind and how much depends on your circumstances.
Single-family homes are still much sought after; according to NAR, almost 80% of last year's buyers purchased a single-family detached home. It appears the American dream isn't dead; like previous generations, families have and will continue to seek a place of their own.
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