Buy first? Sell first?

CrackermooMay 3, 2013

I am newly registered but have lurked here for a long, long time, and I have seen how helpful this group can be.

Anyway I finally decided to leap in and sign up so I could ask for some advice and/or encouragement about my situation.

I am in my late fifties and on my own (no spouse or partner) and I really dislike where I live. I have no extended family here. I have nice neighbours, nice acquaintances, but no close friends.

I feel no real âÂÂtiesâ here. I ended up here for various reasons and stayed for my children, but now theyâÂÂre grown. IâÂÂm ready to move to another town that seems to have many of the amenities I look for. That town is about three hoursâ drive from me.

I have an adult "child" who still lives with me and is saving up to buy a small house. I promised that child that IâÂÂd stay here until next spring, after which time I plan to move. That child will likely follow me to the new city, so we could still live near each other.

HereâÂÂs my problem: I canâÂÂt decide whether to sell first or buy first. IâÂÂve bought and sold several houses over my lifetime and in retrospect, I see that each time I could have walked away with more cash than I did. Each time, I was naive. I was urged by real estate agents to sell low and buy high and that's what I did. After all, they were the "professionals". This was not the same agent or even the same area of the country -- six homes in six different places and six different agents -- but it seems to be what they want (a fast, easy sale) and I was stupid enough to succumb to the pressure.

IâÂÂm feeling pretty cynical about real estate agents these days. When I think if how stupid I was . . . well, whatâÂÂs done is done, but I am not so trusting any more.

This time, money is really tight. I need to sell high and buy low. IâÂÂm getting older and donâÂÂt think I can handle another move. This one must be the âÂÂrightâ move.

I have been scouring the real estate listings for a long time and am fairly confident I can find what IâÂÂm looking for at around $20,000-30,000 less than the value of my current home.

But in my area, the market seems to be changing (from a hot sellerâÂÂs market to more of a buyerâÂÂs market). That makes it a bit harder for me.

If I sell my place first, then IâÂÂm nervous I wonâÂÂt find something I want before my closing. And I donâÂÂt want to be rushed into buying the âÂÂwrongâ place. But by selling my home first, I would know exactly where I stand financially.

If I bought the new place first, then I could take my time and find something I really like. If the timing were right, I could possibly be able to move some of my excess household goods there and stage my current home for an easier sale. But then IâÂÂm afraid IâÂÂll feel pressured to sell âÂÂlowâ (because IâÂÂll have a contract on a...

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maine_lawn_nut

My wife and I are in the same situation and daughter is about to finish college so we have way more cash flow to spend on things other than Take My Money U. And with no family in the area, we can't wait to leave.

Here's a thought and what we are doing. We bought a lot in a subdivision we LOVE. And we made no compromises in the selection.

We can't swing two mortages long-term and with the housing market being so quirky, we are just selling first, renting during thge build, and then getting what we want. Of course you have to be willing to deal with new construction. New construction is the ONLY way to get 100% of what you want and avoid the unknown of what's on the market when you sell.

You have to dig deep and know what you can afford and how long it would really take to sell the house. It's not a gamble we would take.

Think about this. Do you want to move into the new house and then deal with the stress of now having to unload what would then be "baggage". It's a hassle and a lot of stress if the house doesn't sell and then you end up dropping the price to get rid of it for sanity sake.

Just trying to give you options. There is no right answer on this.

    Bookmark   May 3, 2013 at 9:46PM
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Sophie Wheeler

Sell. Then rent in your new location until you know it well enough to buy there.

    Bookmark   May 3, 2013 at 10:15PM
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cmarlin20

Sell first, much better, you will know how much you have, rent something small and simple, take your time to find the right house.

    Bookmark   May 4, 2013 at 12:34AM
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kats_meow

Before reading any of the responses, my immediate thought (I am of similar age to you) is to sell first and then rent in your new location. I know that means you have to move twice. But, if you really need to make a good decision, it is important to take your time and be very sure about the area and the market.

I am sort of surprised to hear that your area is changing from a seller's market to a buyer's market as it is sort of the opposite in most places. That said, if it was me I would sell first and then rent and then buy.

By selling first, you know exactly how much money you have when you decide to buy. There is no possibility of a bad surprise.

By renting first in a new area you will learn a lot about the area and what is available and will be much better able to make a good decision.

    Bookmark   May 4, 2013 at 1:22AM
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nancylouise_gw

I think you answered your own question with the statement of "money is tight". Sell first. Being caught financing two homes is no position to put yourself in when you don't have the money. You don't know if your present home will sell quickly at the price you want. And as you stated you can't trust the professionalism of the REA you are dealing with. One step at a time...sell first. NancyLouise

    Bookmark   May 4, 2013 at 7:44AM
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mpagmom

You could look into renting a pod to store your extra stuff until you get to a new home. That would give you the advantage of selling first without the risk. Hopefully you will be able to find a house you love after you sell, but you can rent as a backup. Good luck!

    Bookmark   May 4, 2013 at 9:12AM
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brickeyee

Nothing gets a sellers attention more than a cash offer with as few contingencies as possible.

    Bookmark   May 4, 2013 at 11:09AM
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Crackermoo

main_lawn_nut, what you wrote makes some sense. I wish I could do what youâÂÂre doing. In the area I am buying, there is no vacant land on which to build. ItâÂÂs all developed. So I am not quite in the same situation as you. But youâÂÂre so right about the house sale being a gamble. You simply never know, do you?

main_lawn_nut, hollysprings, cmarlin20, kats_meow, nancylouise: ItâÂÂs unanimous, then. Sell first. What you say makes sense.

kats_meow, maybe my words about the market weren't exactly on-point. But we've had a hot "seller's market" for a couple of years and it's definitely slowing down. While only months ago homes were selling within days of being listed (sometimes within hours!) and there were bidding wars, now, they are taking longer to sell, selling below the list prices, and there are no more bidding wars.

mpagmom, the storage "pod" is a great idea. That would be perfect for clearing out all the extra stuff to create a spacious âÂÂstageâÂÂ.

brickeyee, youâÂÂre absolutely right. No contingencies. Luckily I have great credit, so I could get bridge financing if necessary.

I donâÂÂt know about renting, though. Yes, it would give me time to make sure IâÂÂve sold my place and found just the right place. After reading these suggestions, I took a look on Craigslist. According to the rentals I found, it would cost between $1,600 and $2,000 a month to rent, and every listing demands a one-year lease. So that adds $19,200 to $24,000 to the cost of my move. I will have to give that some serious thought.

IâÂÂm thinking I will have to make my place as attractive as I possibly can --- making a superhuman effort --- and maybe ask for a long closing. I donâÂÂt know if that will work.

One thing that IâÂÂm noticing: if theyâÂÂre priced right, homes here are selling in a week or sometimes two weeks right now. (That is a slow-down in our market). A few overpriced homes are sitting un-sold longer. In the place IâÂÂm planning to move to, homes seem to be sitting on the market for several weeks. I've noticed some listings have been on the market for nearly a month. Hopefully, that discrepancy between the areas will hold up for the next year.

This post was edited by Crackermoo on Sat, May 4, 13 at 22:23

    Bookmark   May 4, 2013 at 9:50PM
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lafdr

Sell first!! Especially if $ is tight.

We bought first, a less expensive place, and we can carry both if we need to.

BUT, it is way more stressful than I expected to be waiting to sell. We told ourselves it could take a year or more. It has only been 2 months and I want to reduce the price again.

There is no way to know the sale price til you sell.

As far as rent or buy after you sell. I would look to buy and if you find a great place buy, if not rent. Also, if any doubt about the new area, rent so you can leave more easily.

    Bookmark   May 5, 2013 at 8:16PM
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marie_ndcal

I would be very very careful getting a rental off Craig's list. You might contact a RE company in the area you want to live in specializing in rentals. Tell them you are selling but don't want to buy until after you have sold. Who knows they might find something for you, after you have moved or???

    Bookmark   May 5, 2013 at 10:23PM
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nosoccermom

Why would you be very careful getting a rental of CL? That's how most of the rentals in my high rental area go, including those posted by realtors.

    Bookmark   May 6, 2013 at 9:48AM
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xamsx

Yeah I think Craig's List is now a defacto place to find rentals... in my area that is where they are all posted (even if they are in the newspaper or listed with a rental agency). My son found two of his last three rentals on Craig's list. No issues, no problems.

Ann

    Bookmark   May 6, 2013 at 11:23AM
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Zoe52

Sell first. We recently put money down towards a new build out of state. Our home is on the market. But the market is slow. The good news is we have a year to sell bc our builder will not be available to us until next May 2014. He only builds one home at a time. In order to book him, we had to put money down towards a new home on our lot. (we bought the lot in 2004 and it is oficially paid for) In the meantime, we are flexible and can move out as soon as the buyer wants and rent a home near where ours will be built or we perhaps we can rent this one back from the buyer.

One way or the other, we felt it was better to sell first, but we have already laid out money towards the build and the clock is ticking!

    Bookmark   May 7, 2013 at 12:08AM
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jane__ny

Always sell first if you can. We did and we rented for 18 months. I'm glad we did as it gave us time to really look at houses. We did put a lot of our furniture, clothes, etc in storage.

Because we knew we wouldn't buy until we sold, we were able to negotiate the price we wanted to get. We did not feel desperate to sell. We had multiple offers but refused any that didn't meet our goal.

Unless you absolutely have to move, stay in your house until it sells. Once you have an accepted offer, you can start looking at a place to rent.

I wish you good luck and hope you keep us updated.

Jane

    Bookmark   May 7, 2013 at 1:29AM
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cmarlin20

I am a landlord, I list on several sites, two the tenants pay for info, but most of my tenants come from CL. It is a good site, yes there are a lot of scammers on there, but they are usually prospective tenants pulling a check cashing scheme.

    Bookmark   May 7, 2013 at 11:38AM
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Crackermoo

Thanks y'all. I really appreciate all the advice and hearing about other peopleâÂÂs experience. The consensus is to sell first. I guess thatâÂÂs what IâÂÂll probably do.

I still worry about this, though. I canâÂÂt really afford to throw away all that money on rent.

(As an aside, Craigslist seems to be the place to look for rentals. I searched on Realtor.ca for rentals and didnâÂÂt find anything.)

    Bookmark   May 8, 2013 at 8:34PM
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kelpmermaid

I wouldn't think of it as "throwing away money on rent." Buying a new place before you've had time to explore your options might be more expensive in the long run...

    Bookmark   May 8, 2013 at 9:24PM
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jane__ny

Cracker, you won't be throwing away money. It will give you an opportunity to look at your leisure and it gives you a break between making some major decisions. BTW, we used a Realtor to find our rental. It doesn't cost you anything (landlord pays the commission) and she knew our needs and saved us time and the trouble of looking ourselves. She negotiated the rent down $500.00 a month. She got the landlord to paint the bedroom. It was the perfect place for us and I still miss it. I regret not signing another year. It was like a vacation, we didn't have to fix anything nor worry about a thing.

Jane

    Bookmark   May 9, 2013 at 12:21AM
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southerncanuck

Is it really necessary to spend $1600.00 and up to rent? At those prices I'm confident that you would be renting a house, no? Rent an apartment, no it's not a house it's short term, temporary. Store what you won't need and get a month to month if possible. Do the math, breaking a lease on a smaller apartment may cost you less than living out the terms of a lease of a $2000.00 a month rental. They do rent 2 bedroom apartments, or tell the grown child he or she better start looking, being homeless is a great motivator to get adult children out of the nest, believe me it works.

If you're taking a vote sell first is mine. But whatever you do you need to make a decision and get a good nights sleep.

    Bookmark   May 9, 2013 at 3:17AM
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biochem101

There are some apartment complexes in my area (nice ones) that rent By The Month. I've known people who were building a home to move there for a bit. They probably don't have many apartments available like that but they do come up. I would check with a realtor.

    Bookmark   May 11, 2013 at 2:53PM
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