Should You Buy a New Home Before Selling Yours?

By Daniel Bortz, June 19, 2018 (published with curtailment)

For many, it’s an enviable situation: You own a house and have the ability to buy a new home before selling your current place.

Here are the four crucial questions to ask yourself.

1. ARE THE BENEFITS WORTH IT?

First, consider what you have to gain. There are several advantages to buying a second home before selling your current one:

- You can do remodeling work before you move in. Holding onto your current home gives you a place to live while you’re making renovations on your new one.
- You won’t have to move twice. That can happen when you sell a current home before buying a new one, forcing you to move into a hotel room or apartment and put your belongings in storage.
- You can compete against other buyers. Since you don’t have any contingencies on the sale of your existing home, you could have a leg up in a seller’s market, when homes receive multiple offers.

2. CAN I AFFORD TO OWN TWO HOMES?

If you qualify for a second mortgage, you’ll still need to determine whether you feel comfortable shouldering two mortgages at the same time. For instance, if your monthly pre-tax income is $5,000, you ideally shouldn’t pay more than $1,400 a month on your combined mortgage payments (and that still doesn’t cover other property-owning expenses).

3. HOW QUICKLY CAN I EXPECT TO SELL MY CURRENT HOME?

Granted, how quickly you can expect to sell your home depends on where you live — and specifically, the supply of homes for sales in that area.The condition of your home also matters. Generally, homes in good shape or move-in ready sell much faster than homes that need a lot of repairs or renovations.

4. COULD I RENT OUT MY CURRENT HOME IF I CAN’T FIND A BUYER?

First, ask yourself whether you’re willing to take on the responsibilities of becoming a landlord. As a landlord, you’ll be on call when a pipe bursts or a toilet breaks. And you’ll have to familiarize yourself with tenant laws in your state and municipality.

Finally, consider your plans for the long term. If you’re planning to have your house on the market for sale while a renter is occupying it, you’ll need to find a tenant that’s willing to sign a temporary or short-term lease to ensure they’ll leave when a buyer bites.

Alex Alexandrov

The fact Alex came to the Real Estate is not a random choice or saddening revelation. After a long and successful career in music, Alex was looking to devote the rest of his life to his second passion in life - real estate. His interest in architecture and building structures along with his own handyman skills enabled him to buy and flip a few properties in his native Bulgaria before emigrating to Canada. After a long and successful career as a music store and school owner, he met his intimate and business partner, together they focused on acquiring, improving and selling homes in his now hometown Toronto. Soon after getting his Real Estate license, he decided that it was time to fully dedicate his time and talent to a real estate career.
One may ask: what is the common denomination between music and real estate? They are many-says Alex: Striving for perfection-as preparation is crucial for quality performance, so is the preparation for a successful presentation and closing of a real estate transaction. It is people’s business – continues Alex- we deal with personalities, emotions wants and needs. And our job is to find that connection with our client that transforms the otherwise would be boring and burdensome transaction process into an exciting and memorable experience for both- the client and the realtor. Concert performance is successful when the audience and the performer are equally happy. For most people selling or buying a home is the biggest financial activity in their lives and Alex doesn’t take it lightly.
I love working with people – says Alex, I am attentive to their concerns, and see my job more as a real estate consultant rather than a salesperson. My experience working with contractors, inspectors, appraisers, lenders, and realtors enables me to help my clients achieve their goals regardless of what common sense may be. It is their life, it is their desire, and I love helping them to have it in full bloom.
"If you have a question, I will find you an answer" – that’s his promise to new and past clients!