reasons-why-dont-have-to-sell-before-you-buy-featured-image.pngMost people think it’s best to sell their current house before moving into a new one. While this might make sense for someone who might not be able to float two mortgages or need the money from the sale to use as a down payment on their next home (although using a builder’s preferred lender can help you get a down payment), you don’t necessarily need to sell before you buy, and you may actually benefit from keeping both. 

Below are just some of the reasons for keeping your house while you’re in the process of buying a new home.

1. You Need an Interim Place to Live

When building a new home, people know that it will take time before it is finished and ready to move into. Selling your existing house can put you into a stressful time crunch situation. The new owners of your old house wanting to move into it as soon as possible, which can leave your family displaced if your new place isn’t ready yet. While experienced home builders are often able to give you a solid timeframe of when your new home will be ready, there’s always the possibility of unexpected delays. Selling your house only after you’ve moved into the next one will reduce your stress.

2. You Want to Wait for Better Home Prices

As you look at housing market data, you might think that there’s a strong chance the value of your home will increase over the next few years, especially if the market seems to be experiencing a slump or has just started an upward trend. While there’s no guarantee that the market will follow the same paths as previous trends, waiting a few years to sell your house can mean you sell it for tens of thousands of dollars more than you would get if you sold it now. It’s a risk that many people are willing to take.

3. You Want to Get the Best Price

Even if you don’t want to wait a few years for a price increase, you still want to get the most money for your house now. Unfortunately, those who are feeling pressured to sell quickly are often pushed into taking deals that are less than desirable. By holding onto your home for even a few more months, you have a better chance of finding the right buyer. This can make a big difference in the selling price of your house.


4. You Want to Increase Equity in Your Old Home

Due to the process of amortization – where a larger portion of your monthly payment goes toward interest in the early years of paying off your mortgage – many people who have only been in their current home for a few years might find that they haven’t put much of a dent in paying off the principal balance. In fact, even if you sell your house for more than you paid for it, you could end up owing money in the final transaction after real estate agent and legal fees. Renting the home instead helps to pay down the principal balance so you can make money when you sell it.

5. You Want Additional Income

Many people who rent out their homes are able to earn extra money while paying off their old mortgage and increasing their equity at the same time. For instance, if your mortgage payment is $1,100 and you’re able to rent the home for $1,400, that’s an extra $300 in your pocket each month. Plus your renter is paying your mortgage down instead of you! There are also tax benefits you can take advantage of as a landlord. You’ll want to keep some of that money in a savings account in order to take care of maintenance issues that come up, but that extra money can definitely come in handy.

6. You Need to Jump at an Opportunity

Sometimes, you just have to take advantage of an opportunity that comes your way. People looking at buying new homes often think there’s no harm in waiting. This isn’t true. The right house and the right location may not wait for you. New developments in popular neighbourhoods fill up quickly. You may not be able to wait a few more years if you know exactly what you want in a home and where you want your new home to be located. Waiting until your house sells may cause you to miss an opportunity.

Holding on to your current home can be a smart move for those who can afford to do so. Take a look at the potential cost benefits and risks for your personal situation. Talk with a financial advisor and crunch some real numbers to get a better sense of what managing both home costs will look like. When you do these things, you’ll be able to make a decision about whether it’s better to keep your old home rather than sell it.


Photo credit: house & piggy bank balancingcouple next to sold sign
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