If you own a home and want to move to a bigger one, you have to decide which comes first: selling or buying. Both can work. Each has a risk, and the right order depends on your finances and on the market at the time.
Selling first
You know exactly how much money you have to spend, and you're never carrying two homes. The risk is the other side: once your home is sold, you have a closing date, and you need somewhere to go. If the right house doesn't come up in time, you could be renting or staying with family for a while.
One way to manage this is to ask for a longer closing when you sell. Three or four months gives you time to shop without rushing.
Buying first
You get the house you want without pressure. The risk is that you now have to sell, sometimes in a hurry, and you may carry two mortgages until you do. If the market softens while you're selling, that can hurt.
If you go this way, price your current home to sell quickly, not to test the market. The cost of carrying two homes for a few extra months is usually more than the few thousand dollars you might have gained by pricing high.
The in-between options
There are a few ways to soften either risk.
A bridge loan covers the gap when your purchase closes before your sale. Most banks will do one if your sale is firm. It's short-term and costs interest, but it's a lot cheaper than the stress of trying to line up two closings on the same day.
You can make your offer conditional on selling your current home. In a busy market, sellers often won't accept this, or they'll keep marketing their home and give you a short window to remove the condition if another offer comes in. In a slower market, it's more realistic.
And you can set the closing dates close together, ideally with a few days of overlap so you're not moving out and in on the same day.
What I usually suggest
For most of my clients moving up in Vaughan, I suggest getting your current home ready and priced before you start looking seriously. Know your number first. Then decide on the order based on how quickly homes like yours are selling and how fast the kind of home you want is being bought.
I wrote a full guide on this called The Move-Up Method. Or call me and we'll work out the order that makes sense for you.
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