Sell First or Buy and Then Sell?

**fsonetto** · 12-19-2007, 06:55 AM

My wife and I are loking to downsize from a single family home to townhouse. We have found just what we want in our price range but will need to sell our current home to purchase the townhouse. Any rule of thumb as to selling first before buying? Knowing the market isn't good for selling, should we stick to a hard and fast rule as we consider the opportunity?

Many thanks.

**zatanaz** · 12-19-2007, 01:17 PM

Assume you buy the townhouse and put your house for sale.

The way things are right now, your house will be sitting on the market for at least 10 months if you price it correctly.
If you over-price it, it will take longer.
If you under-price it, it will sell faster.

But no matter what happens, you will end up losing money.

Let's say your mortgage is $1,500 a month. If it takes 10 months to sell, you will lose $15,000.
If it takes more than 10 months, you lose more.
If you reduce the selling price by $30,000 you will sell fast, but then again you just lost $30,000.

Aslo, can you affors both mortgages???

I guess what I'm trying to say is that to me it makes a lot more sence to sell your house first and then buy your townhouse.
That way you know exactly how much you get for your house, and if things keep going the way they are now, the price on your townhouse will kepp dropping.

**REbuyersgroup** · 12-19-2007, 01:49 PM

Well the short answer is Sell first. I think you answered the question in your statement when you said you need to sell the home first. I assume you need the proceeds of hte sale or cannot support 2 mortgages.

Do you really need to sell NOW? or can you continue to hold out until the market improves?

Remember, if you sell your home for less, the Townhome will also have reduced in proportion to the home.

**Jim** · 12-19-2007, 08:12 PM

I would sell your single family home first and rent while you find the Townhouse you would like to buy. It will be easier to find financing and you wont get stuck with 2 mortgage payments for any length of time.

You may have to sign a 6 month lease and if you break it your landlord will charge you. So find out what the penalty is before you sign the lease. The best bet is if you can rent a place month to month. But, they can be hard to find.

**Greg** · 12-20-2007, 07:11 AM

I agree. Sell first and then buy. You don't want to be one of those bad luck stories we hear about all the time.

**Mike Taylor** · 12-21-2007, 08:18 AM

Yup, sell first. You could see if the seller would be willing to do some sort of contingency or first right or refusal. That way you could temporarily lock up the house you like and buy yourself some time.

**jasmor81** · 12-28-2007, 11:45 PM

its a great market to rent in - in a lot of places you can rent so much cheaper than you can buy

Do what you want to do - but do what you can afford - If you can't afford 2 mortgages or need the money from the sale of your house - then definatly wait