Many of my clients already own an existing home and, for a variety of reasons, they will be selling their home and buying another. Some of my clients sell their homes to be closer to family or a job opportunity while other of my clients are now expanding their families and need more space. The Denver market is still a hot one and many of my clients ask if they should sell their existing home before buying a new one. Assuming that we’re only speaking about primary residence homes and not rental property or vacation homes, here are some factors you should consider:
1. Inventory
Like I’ve mentioned many times over, the Denver market is hot and that means that the inventory of homes continues to decline as “under contracts” are outpacing new listings. Because of this, it can be a unique challenge when it comes to timing. For example, if your home sells quicker than you’re able to find a new home then there will be a gap of time in which you’ll need to figure out your housing situation. If you’re moving states for example, you may want to consider renting for a short time while you house hunt in your new city. If you’re in the same state and the time frame will be longer than 30 days but shorter than 90 days, you may want to write that into the contract with your buyers that you’ll be in the house a little longer than normal with something called seller occupancy after sale. In this case, you may need to provide the new buyers will some concessions like a rent payment but this is on a case by case basis.
2. Down Payment and Financials
Assuming that you’re selling your home and putting most or all of the proceeds towards the down payment on your new home then it might be a good idea to sell your home before buying a new home. The reason being so that your fund in escrow after the sell of your home will be readily available to put towards the down payment of your new home. Again, you may need to find a short-term rental or stay with family and put your belongings in storage while you house hunt. If you don’t need the profit from your existing house in order to buy your new house then you have more freedom in decision but keep in mind there may be a slight overlap where you’ll need to pay two mortgage payments.
3. Timeliness and Convenience
Aside from financials and inventory, there of course is a big factor of time and convenience. If your time and convenience is the most important factor then this is a decision of personal preference. If you have mobility issues, travel for work a lot or have young kids then staying in a short-term rental while storing your stuff and then moving into a new house a few months later is not a viable option then you’ll want to make sure you sell your home before buying a new one. If you want to have the sell of your house and the purchase of another one align so it’s roughly the same time then stress to your agent that you’re on a timeline and they will be able to help you. Keep in mind, you may need to reassess your wishlist if you’re on a timeline like that, for example if you have a long wishlist or hand to find features, then you may not be able to keep your timeline.
Do you have any pending questions on the next best steps for your situation? Reach out to me, I would be happy to help! Call and text me at (720) 323-4176 or email me at [email protected]
