To Buy First Or To Sell First, That Is The Question
Friday Mar 31st, 2017
When it comes to buying or selling first, we would generally advise our clients that putting your house up for sale while looking for a new home would be a good strategy in lining up a purchase and a sale. Essentially, you only have one property to sell and multiple properties to choose from to purchase. So if you had to do one first, selling would be the logical choice. Not only would you be in a position of knowledge for your personal financial situation, but you would also have a definitive closing date established for coordinating your move. However, this real estate market is hot, hot, hot, and strategies need to be adjusted to the current market conditions.
Like anything else, a property priced correctly will fly off the shelf, and in a real estate market where supply is simply not meeting demand, you can anticipate that values are increasing. The current state of the real estate market in the Greater Toronto Area as well as surrounding suburban areas is vastly changing as inventory is not nearly where it needs to be in order to meet buyer demands. With 5, 10, and 15 plus offers on competitively priced homes where there can only be one winning bid, take into consideration what happens to the buyers who have lost out. The next similar property that becomes available for sale has a buyer pool waiting in the wings.
Given this state of the market, buying first makes sense. Keep in mind that as time goes by, property values are increasing at rates that we have never experienced before. Waiting too long to buy a property may eventually price you right out of the market. On the flip side, an increase in property values means an increase in your home's equity - but when will it cap out, and is that a risk you're willing to take?