Nine times out of ten, buying a new home means first selling the one you live in. This approach is practical for a number of reasons, but it does come with special considerations.
Once your current home is sold, you’ll have a limited amount of time to find a new place, make an offer, and close the deal before the incoming buyer takes possession. This may seem stressful, but with the right approach – and professional help, it’s easier than you think!
In this blog, we’ll look at how to buy a new home after your current one is already sold – without compromising on your needs or budget.
Why Is It A Good Idea To Sell First?
Whether you’re upsizing to a bigger home, downsizing to something more practical, or simply just looking for a change of scenery, it’s important to consider which order you’ll be buying and selling. If you’re not yet sure about whether or not you should sell first and buy second, let’s take a quick moment to go over the pros and cons.
Today, Etobicoke’s housing market is moving at a slower pace compared to a few years ago. This change comes with a few advantages (mainly for buyers) however, it also means that houses are taking longer to sell.
Rather than the lightning-fast sales we saw a few years ago, homes can sit on the market anywhere from one to three months (on average) before finally selling. With this in mind, it can be super risky to buy a new home before your current one has sold. If things don’t go according to plan, you could find yourself paying off two mortgages at once.
Want to know more? I wrote an entire blog post about buying vs. selling first! Click here to read it.
How to Become Market-Ready
Since you’ll only have a limited amount of time to search for and buy a home, it’s best to hit the ground running once your place has sold. Or, in other words, you should have everything you need for a successful house-hunting process lined up in advance.
There are two main parts to this: knowing what you want from your new home and knowing what you can afford.
Know What You’re Looking For
First, it’s important to put pen to paper on what you’re looking for in a new home before you head to the market. It’s much easier to find the perfect home when you have a rough blueprint of what it will actually look like. Put time aside to list out your must-haves, preferred neighbourhoods, and other elements that are important to you.
Know Your Budget
Once you’ve got your list of must-haves in hand, it’s time to determine what your home-buying budget is. Having a solid, informed budget in place means you won’t waste time looking at properties you can’t afford – it can also spare you the disappointment of falling in love with a home only to not qualify for financing.
The easiest way to find out what you can afford to spend in today’s market is getting pre-approved for a mortgage. When you seek pre-approval, your bank will take a close look at your financials and determine what they’re willing to lend you toward a home.
Get Familiar with Bridge Financing
Unless your current mortgage is totally paid off, you’ll need to arrange for bridge financing as part of your next home purchase. This is a short-term loan that covers the temporary gap between the closing date of your home sale and the closing date of your next purchase.
Starting your buying journey soon? Read these blogs next!
- How to Upsize Your Home in Etobicoke
- What Should You Know About Buying a Power of Sale Home in Etobicoke?
- Buying a House Under $1 Million in Etobicoke? Here’s What to Expect
What If I Don’t Find the Right Home in Time?
With the right preparation and agent help, there’s a high chance that you’ll be able to find a great home before the buyer of your current place takes possession. That said, it is possible that you may not be able to buy a home before you’re required to move out. While rare, it does happen from time to time.
At first thought, the idea of moving out before you have a new home lined up can seem super stressful. However, it’s important to never feel rushed or pressured into buying a home you’re unsure about simply because you think you need to. Buying a home under duress only creates more stress down the road, so it’s important to be patient if you find yourself in this situation.
Luckily, there are always solutions to these circumstances. If you’re unable to stay with someone you know, such as a friend or family member, your real estate agent can help you find a temporary housing arrangement that suits your needs in the short term.
Need more tips on buying or selling real estate? You’ll find plenty of advice in these blogs:
- What South Etobicoke Neighbourhoods are Best For Families?
- What to Know When Moving From a Condo to a House in South Etobicoke
- How Much Does It Cost to Buy a House in South Etobicoke?
I’m Picky – Should I Still Sell First?
If you’re worried that you won’t find a home you love before it’s time to move out, talk to your real estate agent. It’s ok to feel skeptical or anxious about finding the perfect place in time, but with the right help, it’s much more possible than you think – no matter how picky you are.
Consider the Season
Etobicoke’s real estate market can fluctuate with the seasons, so, depending on when you’re looking to buy and sell, strategically timing the market can help you get a better result and make it easier to find a great home on short notice. For instance, if you head to the market when inventory is low, you may find yourself unable to find the perfect place in time for your move.
Don’t Forget Your Negotiation Power
As a home buyer, you have negotiation power. During the offer process, you’re able to outline a number of key variables – not just the price of the home. So, if you already have a possession date set following the sale, you can try to closely align the possession of your new home through negotiations. This can help mitigate some of the stress and reduce your chances of paying for temporary housing.
Work With a Team of Professionals
Moving from one home to another is a huge process. Luckily, you won’t be doing it on your own. There are a handful of professionals involved in both the buying and selling process like your real estate agent, mortgage broker, and lawyer.
With that in mind, it’s a good idea to choose and connect your team in advance so they’re able to collaborate effectively and help you make a smoother transition to your new home.
Looking to buy or sell in South Etobicoke? I can help! Call or text me at 647-239-7587 or send me an email at melissa@southetobicoke.com to get started
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