When You Should Sell Your Home First and Buy Later

Most realtors will advise their clients of the “buy now, sell later” strategy, especially for those who want to know exactly how much they’ll have to spend on their next purchase. While in many cases, this is the way to go, there are times when it just doesn’t make sense. Take, for instance, Katherine Scarrow’s recent story in the Globe and Mail, Why we’re selling our house first and buying later

Scarrow had done everything she was advised to do. She had bought in Mimico, an up-and-coming neighbourhood – a location that was highly desirable by the time she went to put her house on the market. Her extensive home reno was complete (she even blogged about it). Financially-speaking, her and her partner were in good shape. They had even taken the time to ask themselves the five questions you’re supposed to ask before selling. They are:

  1. Do I need to move or do I want to?
  2. What will my ‘real net’ be when I sell?
  3. Do I know where I want to move?
  4. Can I really afford what I want/need?
  5. How can I afford to move to an area I like?

As they got closer and closer to realizing their dream of moving, the answer to question number four on the list changed. They went from being able to afford what they wanted to being priced out of the market, which changed the whole “buy now, sell later” strategy. To make a long story short, after a few showings, several open houses, and a near offer, Scarrow and her partner decided that they didn’t feel comfortable with “potentially massive amounts of debt and uncertainty.” Instead, they went with their guts and sought advice.

Here’s the advice they received:

  • Know the rules surrounding your mortgage, especially portability.
  • Know that you have the power to dictate the closing date and use this to your advantage.
  • Do your homework and ask questions of the knowledgeable people around you.
  • Have a Plan B. If you don’t find that perfect house right away, it is okay to rent during the interim.
  • Determine what ‘affordable’ means to you and stick with it.
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply