Buying a House While Selling Your Own

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In an ideal world, you would want to purchase a new house while also selling your old one simultaneously with a short transaction time. Unfortunately, it is more complicated than that and you may need to prepare for the time between selling your house and buying a new one. Deciding on whether you buy another house before selling your old one and vice versa can be a difficult process that requires understanding the risks and benefits of both options.

Pros of Selling Before Buying
– No risk of paying for two mortgages simultaneously
– You will have more cash to finance the down payment on your new home
– Some individuals can not qualify to carry two mortgages
– No pressure to reduce the asking price on your old home

Cons of Selling Before Buying
– Finding a temporary home throughout the buying process may be difficult and also require you to move two separate times
– Storage and moving costs may cause increased financial burden
– Depending on your personal situation you may be pressured to buy quickly and end up making rash decisions

Pros of Buying Before Selling
– More flexibly when searching for a new home with less pressure to close on a house quickly
– Only one move required eliminating moving and storage costs
– More security if something unexpected occurs during the buying process

Cons of Buying Before Selling
– Less financial freedom to invest in your new home (restrictions if making a larger downpayment)
– Financially responsible for two sets of taxes
– May feel pressure to close a sale on your old home quickly which may result in settling for a lower asking price
– May not be able to qualify for a new mortgage while paying for an existing one