Selling your home comes with all sorts of choices, and one of the major ones is deciding whether to start looking for a new home first before listing your current place or listing then starting to look.
Each approach has its own pros and cons, so to help you decide which is best for you, we asked Janai York at Sotheby’s International Realty to help.
What’s the market like?
One of the most important factors when deciding whether to list your home before buying or buy before listing is the type of market you’re in. As York explains, "what we typically say… [is] it depends on the market." Your listing agent will know whether it's a buyer’s or seller’s market and guide you in making the right decision based on your goals.
For example, if you're moving to a location that's in a seller's market, it’s often better to buy your next home first and then list your current one, as finding a new place later could be challenging. However, if it's a buyer’s market, you may want to list your current home first, as finding a new home might be easier.
Market conditions could also influence the terms your listing agent suggests you include in your offers and those you consider from buyers. "If the market's really slow… you can sort of take a risk and look for homes that you like and put an offer in and list your home to sell, because sellers… will consider a subject to a sale offer," says York.
Another scenario to consider is if you find your dream home before listing your current one. In that case, it's important to get a listing agent involved quickly and inform them of the situation.
Since it can be tricky to assess both your current market and the market of the home you're interested in — especially if it's in a different neighbourhood — be sure to discuss these details with your listing agent.
What’s your timeline?
Your timeline is another key factor in deciding whether to list before looking or look before listing.
If you need to move quickly, such as for a job relocation with just a month’s notice, you may have no choice but to buy first and then list your home. However, if you're downsizing and casually exploring your options over the next year or so, you'll have more flexibility. Similarly, if you've already purchased a presale condo with a completion date a year or two away, you have a set move-out date and can plan around that.
Be sure to share your timeline and goals with your listing agent. Keep in mind that buying a new home and selling your current one simultaneously requires careful coordination. Your listing agent can also serve as your buyer’s agent for the homes you're considering, so you can benefit from their expertise in both processes.
Can you handle the financials?
Regardless of the market, buying a new home before selling your current one might not be an option if you need the proceeds from your sale.
Listing first means, "We know what your home is probably worth. We can give you an estimate of what it is most likely to sell for and what you'll walk away with. So you kind of have in your mind now your budget," says York.
There are financing options available, such as applying for a bridge loan to cover the gap between two mortgages. However, this still requires lender approval. Most bridge loans last around six months, though there may be some flexibility.
You’ll also need to think about the cost of temporary accommodations if you list first and then look for a new home. If your home sells and you need to vacate before finding your next place, you might need to stay in a hotel or short-term rental and put your belongings in storage. Alternatively, you may need to stay with family or friends for a while.
While your agent can't provide detailed financial advice like a mortgage broker, they can offer a rough estimate of what you'll net from the sale, which can help you plan accordingly.
Ultimately, the decision to look before listing or list before looking depends on your specific situation. Always consult with an experienced listing agent to figure out which approach aligns best with your goals.
