Vancouver Real Estate is extremely competitive. A question we frequently get asked from clients looking to buy or sell their homes is: what is the better strategy: buy first or sell first? There are many variables that could impact your decision, including your current position within the market, upsizing or downsizing, vacancy rates and demand. Let’s take a closer look.
Selling Your Vancouver-Area Home Before Buying A New One
- You know what is the final sale price and the net proceeds of your sale. This is helpful as there are no unknowns in regard to value
- Less pressure when you sell. Sellers are not under stress to get an offer and not in a rush.
- More control over the terms such as closing dates
- You may not find the perfect home on time to move into
- You may need to move to a temporary rental solution
- Market conditions may change when you are not in the market, this is a specially sensitive point in a rising market.
Buying A New Home in the Vancouver-Area Before Selling Your Own
- You get to choose and pursue your perfect ‘dream’ home
- You won’t be in a temporary limbo without a home
- You may be under pressure to list your home in less than ideal market
- Pressure to generate an offer fast and secure a deal
- Financing: You may need to compromise on financing terms if the proceeds of the sale are not in line with the closing of the purchase.
Subject To Sale Offer: Buyers and Sellers Perspectives
One solution to the problem is to purchase a home with a condition called subject to sale which means there is a time period when the offer is contingent on the sale of your place.
Buyers and sellers have conflicting perspectives on subject-to-sale deals. Sellers are not in a favourable position as they give the prospective buyer more control and first right of refusal. Buyers are in a great position, they are not under pressure to sell their home at a discount and can back out of the deal.
In the present-day Vancouver Real Estate market if we receive a subject-to-sell offer we always advise our seller to add a time clause or acceleration clause, meaning: even if the offer is accepted, the seller reserves the right upon receiving another offer to tender notice to the first buyer to either remove the condition or terminate the contract.
The Market Conditions: Is it a Sellers Market or Buyers Market?
Properly assessing the current conditions in the Vancouver Real Estate market will prepare you for what challenges lie ahead and guide your strategy. It could be very easy to get multiple offers, above asking for your current home, but that fierce competition from buyers could also make buying your new home challenging.
If it is a sellers market → less risk in buying first than selling first.
If buyer’s market→ always sells first.
Buying a Home First: Considerations
If you decide to buy first, few action items to keep in mind:
- Financing: ensure to have bridge financing option available
- Talk to your realtor and get a fair, accurate evaluation of your home ensure you have a realistic sale price range and an optimistic number.
- Be prepared for the unexpected if the market slightly changes
- Try to push completion dates as much as you can so you have more time to prepare and sell your home.
Selling Your Home First: Considerations
If you want to sell your current home first, consider the below.
- Before you list your home, go view properties to ensure you know what type of homes are available to you and if it is suitable solutions.
- Explore the short term rental market just in case you need a few month’s solutions
- Look into the cost of a short term storage solution
Vancouver Real Estate Vs. Your Current Situation
A client’s personality is always something to consider. Some clients are risk-averse while some clients have a more conservative attitude towards large decisions like home purchases. The key is to make sure you are comfortable with your strategy and that you don’t expose yourself to unnecessary risk.
Timing is also an important consideration. Some clients might be ok with risk but have children enrolled in school or activities and they’d prefer that be completed before a big move to a new area.
The Vancouver Real Estate market is very hot right now and there is pressure to move as fast as you can in order to succeed. Be sure to familiarize yourself with the latest rules and regulations pertaining to home sales and purchases and your rights.
A Vancouver Realtor's Perspective
When we get this type of question we first try to assess the clients situation. We ask a series of questions while analyzing the wants/needs and current value of their home and current market trends before giving advice. The key is ensuring you have a realtor you can trust to give you an honest and objective opinion on the matter and guide your transaction.
We offer a free, no-obligation consultation based on decades of experience in the Vancouver real estate market. Click the button below to schedule a call.