Found a home you really want to buy but worried you won't be able to sell your current home in time? In this episode, we discuss if you need to sell your home before buying a new one. We explore what happens if your house doesn't sell in time and if you can delay possession of a home to sell your current home.
Subscribe to our YouTube channel:
Prefer to listen?
Hi everyone, and welcome to another episode of Homebuyer's School. Today I'm joined by Kevin French with Remax Realty, and today the question we're gonna answer is [00:00:30] :
Do I need to sell my home before buying a new home?
So Kevin, do I need to sell my home before buying?
Because I need to know what I'll get before a clear sale, so when I'm trying to buy that house I'll need to know how much money I'm getting for my house.
Yeah, it's typically best to figure that number out. That's more so a mortgage broker question. You'd meet with them.
What's owing on my property, what can I expect to get would be more so your real estate agent, but then from there you figure out your plan.
If you're not getting the equity out of your property that you need to purchase the next property, it might be best to sell first.
The mortgage broker would be better to answer whether or not you could carry both properties, meaning not sell your initial property, move into your next one, and still be paying a mortgage on the other one until it sells.
Until it sells. That's a pretty tough thing too, because you're now paying, wouldn't you say you're paying two mortgages now?
Kevin French: Yeah. Now you're paying two mortgages, unless you rent the properties.
So what happens if I don't sell my home in time?
If you don't sell the home in time, then you might not be able to provide, depending on the finances, you might not [00:01:30] be able to close or move in to the new property.
If you're not able to move into the new property, then that's a whole other issue.
Karl Yeh: Is it?
Kevin French: Yeah.
Karl Yeh: So what are some of my options?
What I always recommend is to sell your property before you move into the next one.
It might be a little bit uncomfortable. You might have to move in with family for a bit.
You might have to rent a place for a short term, but it's better than being stuck in a situation where you're taking possession of a new property and you still have yours to sell.
And then you're a bit in between a rock and a hard place.
Would you put an offer on your dream home even if you haven't sold your current home?
Yeah, [00:02:00] 'cause you're paying two mortgages and it's kind of rough, but what happens if you find a home that you really want, but your house hasn't sold, and you really want that house. Would you recommend just putting the offer on the home?
You could put the offer in on that new home subject to the sale of your current home, however, if you do that, it's typically deemed a less desirable offer, so a lot of people would shy away from accepting it.
Or they would expect a little bit more in return, because now they're property's somewhat less marketable, even though they might be able to still [00:02:30] sell it with a small clause in there, it's typically less desirable for the seller to take that option if it was conditional to the sale of the buyer's home.
Oh, okay. So you can actually put a condition, "I'll put this offer in if I sell my home," but most people don't really take that?
Or that would be a condition that's like, "well, I'd rather take someone that-"
It works. It's a great option that people can explore, it's just that on the selling [00:03:00] side, now you've committed to somebody, and all potential buyers going forward are aware that you've committed to somebody else, so now they feel like they're putting in an offer that they have to beat another price, so it's almost like a quiet competition.
Yeah. So your number one advice is sell your home first, and then go off and purchase.
Kevin French: Absolutely. Yeah.
Karl Yeh: Anything else to add?
What often happens is if people do start shopping while their property is for sale, knowing that they're intention's to sell first, they often become more [00:03:30] motivated to sell their current property.
They might drop the price or add some more incentives to make it a little more appealing to somebody in the open market so that they can move forward with the property that they want.
Delaying possession of a home to sell your home
If I was selling my home, and I wasn't able to sell, during the whole buying process, isn't there a couple months, or maybe extend that from the moment I actually buy a house, extend it to the point where it gives me more time-
Kevin French: Delaying the possession of [00:04:00] the new property?
Karl Yeh: Yeah.
Yeah, you could work with that. It's a lot easier to do with a property that is potentially vacant or is a new build, for example, if you're buying something that's not even built yet, you might be six, eight, 10 months out for build time.
That's something that you could work with, but if you're purchasing from somebody who's looking to sell, they're typically looking to sell and move out within the 60 or 90 day timeframe.
Perfect. Well, thank you very much. Thank you everyone for joining us, and we'll see you next time.
Let us know if you have additional mortgage or financing related questions that we can answer by submitting them in the comments section below.
Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from home buying experts.
About Kevin French:
Kevin French is a Calgary and area based realtor with a client focus. He specializes in a stress free home selling process that is built on customer service. Understanding that your home is one of your largest investments, Kevin employs a marketing mix that ensures you will maximize returns on your home sale. Diligent market research coupled with an in-depth understanding of the Calgary and area markets, allows Kevin to pinpoint the perfect price for your home.
In addition to perfect pricing, Kevin offers a suite of additional services such as professional photography and an interior designer to ensure your home shows its best. Kevin French has become a trusted name in real estate because he is results driven and works closely with his clients to produce the best results.