Consider this the real estate’s version of the chicken or the egg question: what comes first, selling your current house or buying a new one? While there’s no universal answer, there are distinct advantages to selling before buying a house.
However, each home sale is unique, and you don't want to put yourself in a situation where you're panicking to buy a new house before closing. Before listing your property, you should have a rock solid marketing strategy.
A good real estate agent will help make the home selling process go smoothly, which is why Home Bay has partnered with Clever Real Estate. Clever is a free service that matches you with top-rated, local agents who can help sell your home for a low 1% fee! You'll get the full service of a traditional agent at a fraction of the price.
You'll Know What You Can Afford
Most consumers start looking for a new house before they start the listing process because, let’s face it, buying is usually more fun than selling.
Yet by looking for a new home before listing your current one, you likely won’t know how much you can realistically buy the new house for and when you’d be able to move in. So even if you find the perfect home, it might not be practical to buy it, depending on when and how much your home sells for. That’s because most people believe that their homes will sell faster and for more money than how the actual sale process turns out.
Starting with the most accurate listing price gives sellers a fair assessment of affordability when searching for a new home. On the other hand, working with an inexperienced team or agent can create a gap between listing price expectations and reality, causing buyers to go over budget on their next home, which is why it's important to have a qualified agent.
Plus, if you start the home buying process before having an accurate expectation of how long it will take to sell your home, you could find yourself in a sticky situation when it comes to completing both transactions.
You Can Streamline the Home Buying Process
When someone finds a house they want to buy before listing their current home, they often ask for closing to be contingent on the buyer selling their current home.
This contingency puts the seller in a tough bind: accept the contingency and take the house off the market while being unsure when and if the deal will definitely go through, or reject the contingency and lose out on a potential buyer.
Sellers may not even be able to get buyers to accept their contingencies, and even if they do, the deals can get more complicated. If you don’t list your home before making an offer on another one, how do you know whether that contingency will last for a month or a year?
From listing to close, the median home sells in about 30 days according to the St. Louis Federal Reserve. This varies by market, and homes can stay on the market for longer or shorter periods of time where you live.
While contingencies add a layer of complexity to your listing, many individuals in the market prefer to have contingencies on their own sales rather than adding them to their home-buying offers. That’s because an offer on a new home often looks stronger when the seller knows that the prospective buyer already has their own sale lined up.
When making an offer, it helps to have a good agent in your corner. Clever can match you with top-performing, local agents from brokerages like Coldwell Banker and Berkshire Hathaway who can sell your home for just 1%! Clever pre-negotiates with these top agents and passes the savings on to you. And if you buy a house with a Clever agent, you can get up to 0.5% cash back!
You Can Maximize the Money You Make Selling Your Home
If you find the perfect home to buy before listing your current one, you might be pressured into quickly selling your home so as to not lose the offer. Doing so is not only stressful; it also causes sellers to accept less-than-ideal offers if it allows them to unload their homes so they can meet the contingencies of buying new ones.
In this case, time really does equal money. By listing your home before buying a new one, you can afford to wait for the best offers to come in to maximize the selling price.
Too often, however, sellers accept offers far below their listing prices because they didn’t have an accurate view of the market and/or they rushed to sell. In fact, nearly ten times as many listings go through a price decrease than a price increase, according to Realtor.com data.
Listing your home first affords sellers the time to understand what they can sell their home for; and not having any contingencies hanging in the balance allows them to wait for the strongest offer.
Know Before You Buy
If homebuyers do not have a firm grasp of when their existing homes will sell and for how much — not just by estimating based on averages but by actually listing their properties and seeing if they get second showings or actual offers — then they could end up making offers on homes long before they’re able to sell their own.
Waiting until you have a strong indication or even a firm offer for what you can sell your home for allows you to enter the home-buying process with a strong grasp of what you can afford and when you can close the deal.
If you need expert help, Clever can match you with top-performing local agents who can sell your house for just a 1% fee. That's a fraction of the 2.5-3% fee that traditional agents charge, and you'll get the full service experience, no cut corners.
Interested in buying or selling?
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