It's the great real estate debate: Should you buy or sell first in the Ottawa real estate market? There isn’t a one-size-fits-all answer to this question. It will depend on market conditions, the properties in question, interest rates and more. Each strategy has its pros and cons.
Reasons To Buy A Home First
You'll be able to find your best property: Supply is tight in a seller’s market and your ideal property may not come up on the market at the same time that you're selling. And if it does, you're not guaranteed to win the bid.
Interest rate lock: Your lender will lock you into an interest rate when you get your pre-approval. These are typically good for 90 days. Buying first will guarantee that you won't be affected should rates rise during that time period.
Time to renovate: You're heard nightmare stories of people living through their renovations. If you're planning on buying a fixer-upper, it would be nice not to have to live in the home while the renovations are underway.
Reasons To Sell A Home First
Appeal of your property: If you're selling a very unique home that may not appeal to all buyers, selling first is a good idea as it may take a little longer.
Avoid the costs (and stress) of your house not selling: Your lender may require you to have a firm Agreement of Purchase and Sale on your home in order to approve mortgage lending on the new home. If your home doesn't sell before you take possession of the new home, you may not get the mortgage you need to close.
Know how much money you have to spend: Selling first guarantees that will know exactly how much money you will have in your pocket to spend on your next home. Selling your home first will keep the guesswork out of how much you have to spend on your new home.
Questions To Ask Yourself
Here are the four most important questions to ask yourself when considering whether to buy to sell your home first:
- Where will you live if you sell first? Will you live in a hotel? Stays at your parent’s house? Get a short-term rental?
- What will you do with all of your stuff? There are alot of storage options out there but it will cost you time and money (you're essentially moving twice).
- Can you carry both properties? If you purchase first but your house is taking longer to sell, will you be able to close on your purchase? If you can’t, are you willing to take the risk or losing your deposit and possibly being sued? Bridge financing should be discussed with your lender.
- What is your risk tolerance?
Should you buy or sell first in the Ottawa real estate market? We have been in a seller’s market here in Ottawa for a couple of years now. I would say that buying a property first is likely your best bet. Talk to a realtor who knows that market (as well as the micr0-markets of your purchase/sale) and can give you the advice you need based on your specific situation.
Need more information? Give me a call.
Want to know more about selling your property here in Ottawa?
10 Things Nobody Tells You About Selling Your Home
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