Should I buy or sell first?
One of the most common questions we get asked about real estate in Ottawa is whether homeowners should buy a new home, or sell their current home first.
In general, it is very dependent on your market. So let’s start by breaking down the different types of markets you may be in.
First, let's discuss a seller’s market. This is defined by a low inventory of houses in Ottawa and high selling prices. In this market, selling a house is going to be easy. Lots of people are looking to buy, and there aren’t that many houses available to be bought. Houses in this market are usually bought very quickly, at competitive prices. You are most likely able to get away with minimal ‘red tape’ around a purchase, or limited conditions on an offer. The buyer wants to be easy, and this means going ahead with a purchase quickly and simply.
On the other hand, there is a buyer’s market. In this market, there is lots of inventory in Ottawa, meaning lots of houses are on sale. Because of this, competition is high amongst sellers, so prices become more competitive for buyers - meaning lower prices, and more opportunities for buyers to request conditions of sale. They may want extra checks on the property to ensure it is of value to them. They can take their time buying, tour many houses, and get the best price for the house of their dreams.
So what do these markets mean for whether you should buy or sell first?
Most importantly, depending on your market, you’ll want to do the harder thing first. If it’s a seller's market, selling your home is going to be easy. So you’ll want to look into buying first and secure your future home. Then, selling your current one will be easy. If it’s a buyers market, you may want to take some extra time to sell your home first, because it will most likely take longer, and then you can buy your new home easily afterwards.
It will also be dependent on your financial situation. Are you capable of owning two properties for a period of time right now? If not, you may have to sell your current home first to ensure that you aren’t liable for two properties if yours takes a while to sell after you have bought. Then, regardless of the market, you will want to sell first and ensure you have your financial situation in order before you make an offer on another home.
There are benefits to buying a home first. You will be less rushed, primarily. This means you can take your time in finding the perfect new home, which is exactly what you want! Being rushed may mean you make sacrifices on some of the things you’re looking to upgrade on or change, or you may have to spend more money when there could have been a property available to you at a similar price with more things you want.
On the other hand, selling first allows you to destress financially. You know your current home is taken care of, so you don’t have to worry about carrying two properties.
Whichever you choose, you will want to consult your bank and financial advisor(s), as well as your real estate agent. Working with New Purveyors, we can provide you with advice on how to leverage your current property, what kind of market you are currently in, and help you find the best property that fits your needs and your budget.
