Should I Sell my Home Before Buying?

If you are thinking of selling your Los Angeles home you are going to be in one of the following situations:

  • Looking to move up or downsize.
  • Changing school districts
  • Moving to a new city

In any event, if you are selling your home you are going to have to live somewhere, and if you are buying another place then you will need to plan carefully, because with the shortage of inventory in many markets you are going to have to have all your ducks in a row.

So, should you sell your current home before buying another?

Yes and No.

If you do not need the money from the equity in your present home to buy another, especially if you are paying cash, then of course the answer is no. If you are getting any kind of loan you will need to talk to a lender to discuss your options. A bridge loan could be one, renting the home is another, or you may qualify on your own. But establish that first. And if you are moving to a new city chances are you will be renting for a while anyway until you know where you want to live.

If you need the money then you should absolutely sell your home first.

Can you make your offer on a new home contingent on selling your current one?

Of course you can, but in a competitive situation you will be at an extreme disadvantage against buyers who are ready to go. There is a possibility that a seller may look at your offer seriously if you are already healthily along in the escrow process, but if you are then you would not want to take the risk if your escrow on the new home falls through and you end up with nowhere to live. A way around that is to make the sale of your own home contingent upon finding another one, especially since it is still a sellers’ market and buyers may be willing to wait.

Ideally if you can sell your home and find somewhere to live while you look for your new home you will take some of the pressure off the process.

Timing is everything in life, but try not to worry about where the market is in terms of pricing. If you sell low you will buy low and vice versa. Hopefully timing will work in your favor.

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