Reasons to sell before you buy

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 handle.
  • 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 buying.

Next week. What you should do if you want to buy before you sell.

Article by: Dave Welmans - (