Should I Buy or Sell First?

This is a great question. The answer really depends on your individual situation. If I were to generalize, there are some basic guidelines that could help you decide what is best in your situation. First of all, can you foot the bill for owning tow homes at once> If you can, then yes, buy first. This will give you maximum flexibility for moving and and can decrease the overall stress of the process. In this scenario, you can concentrate on packing , moving out, and moving in. Once you're settled, you can then take on the task of getting your original home ready to sell.

In reality/reality, most buyers need the equity from their current home to finance the new home. If this is the case for you, then there are three basic ways to buy a new home:

1. Write a contingent offer. I.E. an offer that is contingent on the sale of your current home.

2. Sell your current home and rent until you find something you like.

3. Get a bridge loan to buy a new place while also buying yourself a little extra time before you have to sell.

When you write a "contingent" offer on a house, your offer will specify a number of days that you have to get your home listed if/when your offer is accepted (typically 5-7 days. If 5-7 days doesn't sound like a lot, I would agree, it is a small miracle every time we pull it off.)

Until you accept an offer on your current home, the home you're trying to buy is still technically on the market. Another buyer (who is not contingent) can come in and make an offer. You will then need to waive your sales contingency or back out of the purchase, thus losing out on the home.

Some sellers are just plain ready to be out of their house and are fine with the idea of renting for a bit while they house hunt. This is convenient because you can do the work of sellling, then do the work of buying while in a temporary housing situation. The drawback is that you end up moving twice instead of once. Some people find that they need a storage unit in the interim (added cost) and others find that most landlords want you to sign a 12-month lease, which may not offer the flexibility to act when a great home comes up.

A bridge loan is a special type of loan that allows you to use the equity in your current home to buy the next, with a timeframe to sell built in to the terms. The timeframe is a lot more doable if you need a few weeks to transistion from one home to the next. Also, a bridge loan allows you to write an offer that is not contingent on the sale of your home, which is a plus in a competitive market. Bridge loans are temporary (3-12 months) and come with high interest rates. They can be risky, so work with a lender you trust and read the fine print.