Now that you’ve determined your mortgage options and are actively shopping for your move-up property purchase, the next decision on your doorstep is related to timing. 

  1. Do you list your home for sale before buying?
  2. Do you buy, but make your offer to purchase on the condition of selling your home in the future?
  3. Do you offer to purchase without having a firm sale of your existing property yet?

Allow us to break this down further.


Do you list your home for sale before buying?

The benefit of listing your home before you purchase your next is that it could confirm there is interest in your existing home and give you an idea of the actual price it may sell for, beyond your previous estimate. Where things may get a bit slippery, is if you secure a firm sale on your existing property before you’ve found your next home to move into. Alarm bells may go off, but don’t panic! Communicate with your realtor and they can possibly negotiate this as a condition into your purchase contract, to allow adequate time to find and buy your new home.

Do you buy, but make your offer to purchase on the condition of selling your home in the future?

This is always the option that we, as mortgage brokers, deem safest. A condition of sale allows you to lock in a purchase price and property while giving yourself the ability to sell your home, plus the best opportunity to align moving and settlement dates. However, the availability of this option can be market dependant. Say for instance, in a more active or ‘sellers’ market, it can be more challenging to have a seller accept your conditional offer as they may not wish to have their home tied up under contract while waiting for your home to sell. They may prefer to sell to another potential customer who is ready to proceed with certainty and defined timelines.

Do you offer to purchase without having a firm sale of your existing property yet?

This option holds the most risk by far. Why? Because you are relying on the sale of your existing home in order to put a down payment on the new property. If your existing home doesn’t sell before the purchase of your new property is scheduled to close, you may not be able to obtain your financing. Following this, if you fail to obtain financing for the purchase of your new home, you will have essentially breached your contract of sale and may be liable for damages and/or losses sustained by the other party. Generally, the result of this would be losing your deposit, however, if the vendor decides to sue you for any losses due to your failure to complete the contract, you will incur further costs. 

You should only consider this option if you have a solid back-up plan. For example; perhaps your parents can assist with the new down payment, your mortgage broker can source alternative financing, or if you are 100per cent confident that your home will sell prior to your new purchase closing. Regardless, your mortgage broker will be able to equip you with all of the information you need to weigh your options.

As with most aspects of life, timing is everything and choosing when to list and sell can be a daunting choice to make. Luckily, with teamwork from your experienced mortgage broker and realtor, you don’t have to make it alone.