How to Buy a House Before Selling Yours

Most people choose to sell their current home before they buy another one. However, that’s not the only option available. In fact, there are actually more benefits to buying first than some people expect.

Every homeowner is different, and choosing to buy first and sell second could be the right move if it fits your personal goals. That said, you will want to approach the market differently if you plan to do it in this order.

Keep reading for advice on how to buy a house before selling yours.

What Are The Pros of Buying a House First?

In some ways, buying a house before selling your current home is the riskier option. However, that doesn’t mean there aren’t upsides to it either.

You Have More Time

Let’s start with the best part about buying first: time. When you sell your house, you’ll only have a few weeks or months to pack up and move out. This is a big task on its own, and adding house hunting to your to-do list can get overwhelming fast.

On the other hand, buying looks a lot different when you don’t have a move-out date looming over your shoulder. Choosing to buy first means you can take as much time as you need to find the perfect place. You’ll never feel rushed or pressured into buying something just because you need a place to live.

Easier Planning

Having a new home lined up sooner also makes it much easier to plan and organize your move. You can book movers, set up key services, and take care of everything ahead of time since you already know where you’ll be living next.

 Thinking about buying a home? Check out these related blogs next!

• What’s the Average Down Payment on a House in Ontario?
• How to Budget for Buying a Home
• Here’s How to Write a Winning Offer Letter

What Are The Cons?

Double Your Housing Expenses

One of the biggest risks of buying a house before selling yours is that you could get stuck paying two mortgages temporarily. Let’s say you rush to list your current house after successfully buying another. There’s no guarantee that it will sell before your purchase closes, especially in today’s market where properties in the Greater Toronto area are taking longer to sell on average.

Managing the costs of not one but two homes can be difficult. Beyond just the deposit, down payment, and mortgage, ongoing costs like utilities and insurance can also add up in a hurry.

Room For Miscalculations

Another potential downside of buying first is that you may overestimate what you can afford to spend on your next home. After all, you won’t know how much money you’ll make on the sale of your home until it’s actually sold. If it happens to sell for less than you were anticipating, it could put a strain on your finances.

Buying When You Don’t Plan on Selling

What if you’re looking to buy a new house but don’t have any intention of selling the one you currently live in?

Buying a second house without selling the first also comes with special considerations. These implications can be financial, legal, or even lifestyle related, and they can become particularly complex depending on how you intend to use your properties.

So, before you add another property to your portfolio, you’ll want to have a solid plan in place.

Buying to Invest

Let’s say you’re buying a house with the intention of turning it into an income generating rental property. Or, maybe you plan to use your current place as an investment while moving to your new one.

In either scenario, you’ll need to understand the implications and responsibilities of being a landlord in Ontario. This includes everything for tenant sourcing and communication to reporting your income and expenses during tax season and more.

Bonus Tip: Beware of Capital Gains Tax

Taxation is another important thing to consider when buying a second home. In Canada, you can only have one “principal residence”. If you sell a house that is not this residence (i.e an investment property or vacation home), you will face capital gains tax.

It’s never too early to think ahead. Find advice on selling your house in these blogs.

• Do You Need to Stage Before You Sell?
• How Long Does it Take to Sell a House?
• How Much Does it Cost to Sell Your Home?

Need Help Buying a House?

​​If you’re looking to buy a house, you’ll want to work with an experienced and knowledgeable real estate professional. That’s where we come in. As Vaughan’s top real estate team, we’ve been helping local buyers for close to 40 years, and know what it takes to provide a seamless buying experience. Our proven buying process helps ensure that you secure your dream property – and for a great price.

Buying or selling? We Can Help! Call 416-571-2724 or send an email to info@arciteam.com today!