The decision of whether to sell your current home first or buy a new one before selling, potentially using bridge loans, depends on various factors and individual circumstances. Here are some considerations for both approaches:
Selling First:
- Financial Certainty: Selling your current home first provides financial clarity. You know exactly how much money you have from the sale to use toward your new home.
- Negotiating Power: You will have stronger negotiating power when purchasing a new home with cash in hand, especially in Marin County where there’s a limited supply of homes available to buy and the most desirable ones usually have multiple offers.
- Reduced Financial Risk: Selling first reduces the financial risk associated with carrying two mortgages if your current home doesn't sell quickly.
Buying First with Bridge Loans:
- Timing Considerations: If you're in a competitive market where desirable homes sell quickly, buying first might be necessary to secure the property you want.
- Convenience and Timing: Buying first with bridge loans allows for a smoother transition, minimizing the need for temporary housing or storage of belongings.
- Maximizing Profits: Buying a new home before selling your current one can be financially savvy. The upfront cost of a short-term bridge loan may be offset by the potential for a higher sale price, especially when your current home is well-prepared and staged for a more lucrative sale.
Factors to Consider:
- Market Conditions: Assess the current real estate market in your area. In a seller's market, buying first might be more challenging, while in a buyer's market, selling first might take longer.
- Financial Stability: Evaluate your financial stability and ability to carry two mortgages, even if temporarily. Consider the costs associated with bridge loans, such as interest rates and fees.
- Personal Comfort Level: Consider your comfort level with the level of uncertainty involved in each approach. Some individuals may prefer the financial security of selling first, while others might be comfortable managing the logistics of buying first.
- Contingency Options: Explore contingency clauses in real estate contracts. Some sellers may be open to contingent offers, allowing you to buy before selling.
It's advisable to consult with a financial advisor and a real estate professional to assess your specific situation and make an informed decision based on your financial goals and the current market conditions.
