Dear Heather:

I am looking for a new house, however; I have to sell my existing condo first in order to buy. How do you recommend I go about doing this?

In a Dilemma

Warwick

Dear Dilemma:

Home buyers and home sellers each face their own challenges, but for many the two processes go together. Most families cannot afford to hold multiple homes, so the decision to move generally means both buying a new one and selling the current property.

Those attempting to both sell their home and buy a new one may feel overwhelmed by the combination, and can benefit from turning to their real estate agent for help. Most agents work both with home sellers and home buyers.

Buying first —

It may be impossible to perform the closings for both deals on the same day for any number of reasons. Other sellers have time constraints too, simple delays may render such an arrangement impossible or impractical. Even if the two deals are closed on dates very close together, challenges remain.

When buying first, homeowners must be prepared to temporarily cover the cost of two households this can involve getting a bridging loan, which can be difficult in this economy. If the first home does not yet have a buyer, or the deal is not yet finalised, the owner must be sure to maintain the property in good condition. This can be challenging with the distractions of moving into a new home, but it is necessary for a sale.

Buying first may give families some logistical benefits. Specifically, furniture and personal belongings can be moved more conveniently from the old home into the new one, on the home buyers’ schedule, without having to coordinate.

Selling first —

When selling first, the most immediate problem becomes the need for a place to live between the two transactions. Those fortunate enough may have relatives or friends living near their destination, and can try staying with them briefly. Another option, however, is to rent the home. Home buyers may be willing to rent their new purchase back to the previous owners for a brief period, whilst either the other side of the process goes through or they find somewhere suitable to lease for the interim.

As an advantage, owning only one home at a time means coping with fewer overlapping responsibilities, as well as providing the financial advantages of making the proceeds of the sale available for the new purchase.

As an Agent I recommend that you take some time at the beginning of the process, to determine whether it will be easier to buy first or sell first, look at your options and be prepared. A real estate agent can help with this, clarifying the market conditions in both relevant neighbourhoods to figure out which aspect will offer more benefits in your situation.

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Heather Chilvers is among Coldwell Banker Bermuda Realty’s Leading Sales Representatives. She has been working in Real Estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332 1793. All questions will be treated confidentially.