Which Comes First … the Buy or the Sell?

When a hermit crab decides it’s time for a new home, it scopes out a new shell before vacating its current accommodation.

But for homeowners, the process is not so easy.

Whether you buy a new home before selling your current one – or the other way around – the choice of what to do first comes down to which option makes you the most comfortable.

Both have pros and cons, and here are some to consider:

Sell first

  • When you know what your current home has sold for you can zero in on exactly what you can afford in your next one.
  • Because you already know the conditions of your own home’s sale, such as the closing date, you can make informed offers.
  • The downside: If you can’t get possession of your new house before leaving your current one, or even worse, can’t find what you’re looking for, you’ll need temporary housing. Can you afford a short-term rental, and what will you do with your furniture while you’re waiting?

Buy first

  • If you’ve found a home with unbelievable features in a great neighbourhood at an awesome price, the pressure is on. You really want this dream home, so in this case, you may have to buy before selling.
  • If the local real estate market is hot, you might feel safer buying first.
  • It’s probably a safe bet your home will sell fast, unless it’s out of step with its neighbours; if it’s a fixer, or if it’s the best home in the neighbourhood, it may languish or sell below asking
  • The downside: If you buy first and your home does languish, the worst case scenario is you’re stuck with double mortgage payments.

And double stress.

Some families handle risk better than others. What kind and how much depends on your circumstances.

Bad Neighbours can be Hazardous to Your Property Values

It’s every homeowner’s worst nightmare:

Your new neighbour has decided to tear down the charming colonial and build a monster home. Or he’s turned his backyard into a junkyard. Or she’s having noisy parties.

Yes, having bad neighbours can be awful. And did you know they also can lower the value of your home by up to 10 percent.

A recent study by the US Appraisal Institute indicates that your neighbourhood – and your immediate neighbours – can be game-changers when it’s time to sell. You may be looking at a 5-10 percent drop in your home’s value. And a lower selling price.

And it’s not just close neighbours; it’s your street and often your whole neighbourhood. Barking dogs, poorly maintained properties, utility towers, and even funeral homes can make your neighbourhood less desirable, and your home less saleable.

What can you do? Not much after you’ve bought, although you can approach your neighbour and/or a lawyer to try to stop the offending behaviour. But you can practice due diligence before you buy.

Visit your potential neighbourhood at night and during the day. Drop by on weekends. Drive around neighbouring streets to get a feel for the area. Note the proximity of commercial properties. Chat with the neighbours to find out if you share the same commitment to maintaining your properties. Consider contacting the local police and checking crime stats.

Whether you’re buying for the long term, or may sell in the next few years, checking out your neighbours and the neighbourhood only makes sense.