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One of the biggest questions I get from homeowners isn't what their home is worth or when they should list it. It's this:
"Should we sell our current home before we buy our next one?"
It's a fair question, and one that doesn't have a one-size-fits-all answer. Every family's finances, comfort level, and goals are different. That said, after more than two decades helping people buy and sell homes throughout Edmonton, Spruce Grove and the surrounding communities, I've seen enough transactions to know that some approaches consistently create less stress and produce better financial outcomes than others.
For most people, I believe the safest approach is to sell first, then buy.
That might not sound very exciting. In fact, many people initially dislike the idea because they're worried they won't find their next home in time. But once your current home is sold, everything becomes much clearer. You know exactly how much money you'll have available, your mortgage broker can give you an accurate budget, and when you make an offer on your next home, you aren't asking the seller to take on additional risk. That makes your offer more attractive and often gives you more negotiating power.
Perhaps most importantly, you've removed one of the biggest sources of stress from the process. You're no longer wondering whether your home will sell before a deadline arrives. Instead, you're simply looking for the right home.
Of course, selling first isn't perfect. Occasionally the timing doesn't line up exactly, and you may need temporary accommodations or storage between homes. While moving twice certainly isn't ideal, I've found that most people would rather deal with a temporary inconvenience than make a rushed financial decision involving hundreds of thousands of dollars.
Some homeowners choose the opposite approach and buy first. This can work very well, but only if your finances support it. Depending on your situation, your lender may be able to arrange bridge financing or another financing solution that allows you to own both homes for a period of time. This approach lets you shop patiently instead of feeling pressured to find something before your current home sells. The downside, of course, is that you may temporarily be responsible for two mortgages, two property tax bills, two insurance policies and all the other expenses that come with owning two properties. That's a conversation you should have with your mortgage broker before you ever start looking at homes.
Then there's the strategy many people hope will solve everything: writing an offer that is subject to the sale of their current home.
On the surface, it sounds ideal. You secure the home you want, but you're only obligated to buy it if your current home sells first. Unfortunately, in practice, this is often the most stressful option of all.
The first challenge is convincing the seller to accept your offer. Remember that from their perspective, your purchase now depends on another house selling, one they have no control over. They're effectively waiting for two transactions instead of one. Naturally, many sellers are reluctant to accept that uncertainty.
In a strong seller's market, subject-to-sale offers are often at a significant disadvantage. If sellers have multiple buyers to choose from, they're unlikely to choose the offer with the greatest uncertainty unless it's substantially stronger in other ways, such as offering a higher purchase price or more favourable terms. Even if they do accept it, they'll often include what's commonly known as a 24- or 48-hour escape clause, allowing them to continue marketing the property.
That clause can create enormous pressure. If another acceptable offer comes along, you'll receive notice that you have a limited amount of time, often just 24 or 48 hours, to remove your sale condition or lose the home. At that point, you're suddenly racing against the clock.
Ironically, a buyer's market doesn't necessarily make subject-to-sale offers any more appealing.
When homes are taking longer to sell, sellers are already worried about finding a buyer for their own property. Asking them to also take on the risk that your home may face the same challenges doesn't usually make the situation more attractive. Instead of solving one uncertainty, you've simply doubled it. While some sellers will still consider these offers, they often do so only because they have few alternatives, not because they're comfortable with the arrangement.
The biggest problem isn't actually the contract itself. It's what happens emotionally after it's accepted.
Once you've mentally moved into your new home, every showing of your current home feels critical. Every day without an offer becomes stressful. Every piece of buyer feedback feels more significant than it probably is. Before long, many homeowners start asking whether they should lower the price, accept weaker terms, agree to costly repairs, or make other concessions simply to get their home sold before their purchase disappears.
I've seen homeowners negotiate an excellent price on the home they were buying, only to give away far more money on the home they were selling because they were under intense time pressure. In the end, the numbers often work against them.
That's one of the reasons I generally view subject-to-sale offers as a strategy to use only when there's a compelling reason, not as the default plan. There are situations where they're appropriate, and I've successfully negotiated many of them over the years. But they should be entered into with a clear understanding of the risks, not because they seem like the easiest solution.
The reality is that every move involves some compromise. Selling first may mean temporary housing. Buying first requires stronger finances. Subject-to-sale offers can work, but they often transfer the stress from one part of the transaction to another rather than eliminating it.
The good news is that none of these decisions need to be made alone.
One of the most valuable things a REALTOR® can do isn't simply open doors or negotiate contracts. It's help you develop a strategy before any paperwork is signed. That means looking at your home's likely saleability, your financial position, current market conditions, and your personal comfort with risk. Often, a thirty-minute conversation before you start looking at homes can save weeks of stress and potentially thousands of dollars later.
If you're thinking about moving in the next few months, or even next year, I'd be happy to sit down with you and discuss the different approaches. Every situation is unique, and there's no obligation. Sometimes the most valuable advice comes long before your home ever hits the market.
