"What should I do first: buy my next home or sell my current one?"
Unfortunately, there is no easy answer to this question, because the right answer entirely depends on your situation and the current real estate market. So, whenever we get this question from clients, we end up answering it with them, not for them.
The first thing to consider is the reason for your move. Here are some common scenarios to help you decide whether buying or selling first is right for you.
You're looking for your dream house
If you have specific requirements for your next property, and you won't move unless you find that perfect property, then you're probably going to have to buy your next home before you sell. The biggest problem with this scenario is obvious - you can get stuck with two houses.
There are other problems with this scenario. If you find and buy your dream home, you've put yourself in a very motivated selling position, and you may feel pressure to accept offers on your home that you would not have considered if you weren't so motivated to sell. If you qualify for "bridge financing," you could end up costing yourself a lot of extra money if you end up carrying both homes for any length of time. For these, and other reasons, we very rarely recommend buying first.
You're selling for financial reasons
If you're selling because you can't afford your current home, then you're probably not going to be able to afford two homes either, so you're going to have to sell first. If you're honest and up front with us from the start, we will be able to do our best to line up the possession dates on the properties to minimize any inconveniences.
You have 3 dogs, 2 cats, 8 kids and a renter in the basement
If it's nearly impossible to get access to your home for showings, and when we can arrange a showing it looks like crap, things probably aren't going to go very well. In this scenario, we can probably get a lot more money for your home if you're not living in it, and we may recommend that you move out before we list it.
A typical solution
In the end, we will counsel each client differently, depending on their situation. Of course, the final decision is always up to our clients, many of whom are comfortable with the following scenario.
We have a look at your home and give you an evaluation, so you have a good understanding of the value of your current home and what you can afford for your new home. Then we go look at a number of houses on the market in the price range you're considering. If you feel comfortable that you could find something you'd like in your price range, we put your current home on the market and see how it goes.
What about a "sale of home" condition?
Another option is to put an offer on a home, that is conditional upon the sale of your current home. The biggest problem with this condition is getting the seller to take your offer seriously. If your home is already on the market, and is priced and marketed well, the seller may take your offer more seriously than one that is over priced or not even listed yet. If the "sale of home" condition is necessary, you may have to be more flexible in other areas during the negotiations.
Of course, you also have to consider what is currently happening in the local real estate market before you make any decisions.
In the end, there is no "right solution" for every situation and we'd be happy to discuss your situation anytime.