If you are looking to buy a home, and you already have one to sell there is a key question that needs to be addressed. Do you sell before you buy, or wait until you have found a home and then sell? The answer depends upon a number of criteria, your financial situation, the state of the housing market, and are prepared to move into rented accommodation.
It is fair to say that it is nearly always better to sell your home before buying, especially if your financial situation means that you cannot afford or are just not prepared to carry two mortgages. This is especially true in slow markets when it may take many months to sell your home. Even if you think you can afford this, your mortgage company may have other ideas, and may not be prepared to give you the money.
If you do choose to sell first then be prepared to find your new home fast, make sure you have done your homework and know what you want and where you want to buy. Either that or be prepared to move into rented accommodation and take your time house hunting. There is one other option; you can tell your Realtor to place a contingency into the buyers offer to say that you will only sell if you can find a home.
If you don’t want to sell first, then you do have the option of writing an offer containing a contingency on the sale of your current home. In order words you agree to buy the home, only once your property has sold. This is fine, but the chances are the seller (of the property you are buying) will want to keep their home on the market to see if they can attract another buyer. If they find another buyer then you are then given the option to either remove the contingency and complete the purchase, or pull out of the offer.
In a hot property market it may be possible to buy first, knowing that in a fast moving market your property has a better chance of selling quickly. This is especially true if you are buying a new construction property, where you get several months between you signing the contract and the property being built and ready to move in.
One thing is sure your choice to sell or buy first is a big decision, and should be discussed with your Realtor and mortgage broker before making any decision.