Kitsilano Real Estate Questions
Which do you do first: Sell your old home or buy your new home?
If you’re thinking about your next move and already own a home in Kitsilano or Vancouver, one of the questions you’ll surely have is whether to Buy your next home before or after selling your current home? This is an easy answer for some, and a loaded question for others, so I’ll break down some reasons for buying or selling first.
One thing to keep in mind – when you sell your home (and there is a firm contract to buy the home), the transaction doesn’t actually complete for anywhere from a few weeks to a few months. The “Completion Date” of your home is the day the Buyer pays the Seller, and the Seller gives the keys to the Buyer – this is the day you have to have the fll amount of funds needed for the purchase. Therefore, you can get into a firm contract to buy a home, but you may not need the money to purchase it for a month or two.
Selling before you enter a firm contract to buy a new home
Selling your current home before buying your next home is the easy answer, and frankly, the safe answer as well. A few of the reasons why this is a good idea are below.
One thing to keep in mind – if you sell your home without buying your next one, you may have to rent a home for a certain period of time, which often requires that you put some of your belongings in storage. At the end of the day, you’re moving twice (once to the temporary home, and once to your new home). This isn’t an ideal situation for many, but the negatives are out weighed by the positives below:
1. You’ll know how much money you have to work with: When you sell your current home, you’ll know exactly what your proceeds from the sale are, and when that money will be transferred to you. This makes the mortgage approval process easy for your next home, and removes all doubt as to what you can afford on your next purchase.
2. Time is on your side: After your current home sells, you can take your time to find your next home, rather than jumping at the first few properties that may work (assuming you’re okay with the possibility of renting). This allows you to really scour the market, view property and find a good sense of exactly what you’re looking for. If you find the perfect home and realize the Sellers need a quick closing you will already have the funds to complete the sale, so it shouldn’t hold you back. Alternatively, if you find your perfect home and the Sellers require a long closing, you can work with their demands and not let it hold you back from the sale. If you sold your home in a hot Seller’s market, you also have the chance to wait until the market cools off to (hopefully) take advantage of a Buyer’s market.
3. Lifestyle Change: If you sell your home and the transaction completes (i.e. the new homeowner moves in) you’ll have to find a new, temporary place to live. Often, people will choose to move back in with family, though not ideal, this might allow you to save some extra money. Alternatively, people will find a place to rent, which will allow you to try living in a different neighbourhood, or living in a different style of home to get a sense of what you may like for your next purchase. Regardless of which option people choose, the chance to purge your belonging and learnt o live with less often come sup, and most people are happy they did this.
Entering in a firm contract to buy a home, before having a firm contract to sell your home
Buying your next home before selling your current home does happen occasionally. Often, families with young kids will choose this option so they know they have a place to settle into, however, you have to consider the possibility that your finances might not come together and you’ll need to find a way to bridge the gap. At the end of the day, the only people who can truly consider buying first are those who have already have the funds needed to buy their new place.
1. Financials: Often people who choose to buy their next home will choose a long closing date (i.e. 4 months later) in order to give their current home a chance to sell. This allows you to organize the sale dates so you receive the funds from the sale of your current home, and the next day transfer those funds to the purchase of your next home.
2. You’ll know where you’re going: Many people who buy first often do so because they only want to move, if they find something that suits them better. Their current house probably does the job, but they want some certainty that their next house will be a better match. Buying first allows you to take the time to find your next home, before the stress of selling your current home – especially good if you have kids. If you have the funds, you can even move into your new home so you don’t have to be bothered during the sales process of your old home.
Sell and Buy
Selling your old home while actively looking for your new home
At the end of the day – most people decide to do the buy and sell process in conjunction with each other. While attempting to sell their home, they can be actively looking for their next home. As soon as they get a firm contract from a Buyer, they can go ahead and put in offers on their name home, knowing the sale price of their old home and the completion dates of the transaction.
Let us know if you have any questions on the process – it can be confusing, but we’re happy to set you on the path that works best for you an your family.