Buying a home ranks right up there with divorce, marriage, death and
affairs in the stress stakes but you need to get to grips with your
emotions in this poker game if you don't want to lose out in a big way.
Our insecurities and drive for the basics of shelter and home pressure
us into wanting to buy before we sell our existing home but this can
be detrimental to your buying process. We all have an animal instinct
- cancerians more than most others - to know where we're going to be
putting our head at night- where the family is going to feel safe and
not in box three on the street. This emotional fear should be managed
to give you the best options when buying.
Here are some of the reasons why:
- Financially it can be a deep and dark hole if you do buy before
you sell your own home. Ask renowned motivational speaker Mike Lipkin
about his experience and he'll tell you that it led to his emotional
breakdown. An up and coming advertising executive in Toronto, Mike
traded-up and bought a bigger home before selling his own. The market
turned and he was stuck with two homes and more debt than he could
- If you've sold your home, you can work out how much money you have
to use as a deposit. Bar exceptions, which can be managed, you're
in a much better position to finalise your spending budget once you
know how much you'll be receiving for your home.
- Having sold puts you in a position to make a clean offer. A clean
offer means that there is no condition or 'subject to' clause on the
sale of your house. This will make your offer much more attractive
to the seller and their agent to such an extent that your lower offer
might well be accepted before a higher conditional offer.
- You know your time frames. Things are much clearer once your house
is sold and you can use this to your advantage.
- Your bank manager will be much happier if you've sold your property
before putting in an offer on another. The positive equity that is
being realized in the deal is also quantified and helps strengthen
your financial position.
Overcome the fear of homelessness to take advantage of these considerable
benefits when buying. In a sellers market, which is what the market
has been, this is a sound strategy to maximize your opportunity when
Next week. What you should do if you want to buy before you sell.