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This
is your dilemma:
Should you wait for the right home to come on the market before
putting your current home up for sale or should you sell first and
then go out and find what you want?
While there
is no simple answer to this question, you will probably come to
a definite decision based on your personal comfort levels with regard
to the following...
SELL FIRST
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Pros:
- You
know exactly how much money you have from the sale of
your first home and can comfortably choose your next home's
price range and negotiate accordingly.
- With
cash in hand you can immediately make firm offers on any
property that meets your needs. If a property pops up
that is perfect or extremely well priced you can be the
first in the door with an offer.
- You
have more negotiating power. When Sellers turn down or
counter an offer that is conditional upon the sale of
a home, they usually believe that the Buyer will come
back with a more serious offer if and when the Buyers'
home has finally sold. Sellers give much more consideration
to unconditional offers since they usually realize the
Buyer does have other options and may move on and pursue
a different property if their final offer is rejected.
- If
more than one property interests you, you can shop around,
negotiate, and finally settle on the best deal.
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Cons:
- f
the right home is not currently on the market when you
finally sell, and nothing comes up before your closing
date, you may have to find alternative accommodation until
something appropriate comes along.
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Questions
you should ask yourself
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Do
you have reasonable options available if your closing dates
do not line up and you cannot move into your new home the
same day you move out of your current home?
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How
would you and your family react to the stress of having to
rent for an unknown period of time?
BUY
FIRST
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Pros:
- If
you are only interested in moving if a very specific property
comes up, buying first ensures you do not miss out on the
perfect opportunity.
- If
a unique or underpriced property comes on the market and
you do not think it will last long, snapping up the deal
ensures someone else does not buy it out from under you.
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Cons:
- If
your current home does not sell quickly enough you may end
up having to finance both homes and carry the extra debt
until you do sell.
- You
do not know what the final selling price of your current
home will be. If your budget is tight, this could affect
your financial decisions. While you can get appraisals and
market evaluations of your current home's value, nothing
is for sure until you actually get an offer.
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Questions
you should ask yourself
- How would
you react to the stress of owning two homes at once?
- Would you
have the financial reserves to do this?
- How would
you feel if you were eventually forced to sell your current home
at a "fire sale" price?
CONDITIONAL
OFFERS
A
third option involves making your offer to purchase conditional
upon your being able to sell your current home within a specified
time period. Conditional offers usually include a clause that allows
the Seller to continue to market his or her property while you try
to sell your home. If the Seller receives another bona fide offer,
they can accept it and ask you either to remove your condition and
firm up or to step aside. While conditional offers do not provide
all of the advantages of the first two options, they do offer a
reasonable compromise for those uncomfortable with the drawbacks
associated with either selling or buying first.
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Pros:
- You
do not have to sell your current home until you have found
and negotiated an acceptable price on your next home
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Cons:
- You have less negotiating
power. Sellers sometimes turn down or counter an offer that
is conditional upon the sale of a home. There is a general
impression that Sellers give less consideration to conditional
offers than they do to firm ones. Some Sellers feel that
the Buyer will come back with a more serious offer if and
when their current home has finally sold. You may end up
having to pay a bit more for the house in order to get your
conditional offer accepted and be first in line.
- Another purchaser may make
an offer and bump your offer before you have sold your current
home, putting you back at square one.
- You cannot withdraw your
conditional offer until the time set out in the condition
has passed. This could be frustrating if a better deal comes
along and you wish to pursue it.
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