Houses: Do I buy or sell first?
Every homeowner intent on changing homes faces the same question: “Do I buy or sell first?”
The answer depends on market conditions. Which do they favour-the buyer or seller?Here are some basic guidelines for answering that question:Buyer’s market:
Buyers have the advantage because there are more homes available for sale than buyers and the buyer can pick and choose from a good selection.Rule: Sell first, then buy.
Reason: In a buyer’s market, there is an abundance of listings in competition with your home. But trying to sell your home before buying, you won’t be rushed into unloading your home to avoid holding two properties.
Once you’ve sold, you’ll also know how much money you have for your new home.
Sellers have the advantage because there are more buyers than available listing and the selection if limited.
Rule: Buy first, then sell.
Reason: If you see the home you like and can afford-buy. It may not be there tomorrow. The shortage of listings is going to render your home quite saleable, as long as it is properly priced.
If you we to sell first and then found it difficult to find a new home, you could be stuck arranging interim housing.
Houses this fall
So, which market are we in-buyers or sellers? That depends on where you live, according to the Royal LePage Survey of Canadian House Prices for the third quarter of this year. The survey is the largest of its kind in Canada. It looks at seven types of housing in 250 neighbourhoods across the country.
Most markets reported less real estate activity in the week following the September 11th tragedy in the United States.
“However, by the third week of September, activity had resumed to normal levels and many cities reported an increase in housing sales in September 2001 over September 2000,” according to a Royal LePage release.
Low interest rates
House sales are down from a record level in August, according to the report. Real estate analysts say low interest rates and strong consumer confidence fuelled that summer buying spree.
Now, although interest rates remain low, and likely will stay so for the foreseeable future, consumer confidence is also low. And that’s not good for sale in any category. However, analysts do say typically, house sales dip in the fall.
City by city
The latest house price survey shows it’s a buyer’s market in Toronto, Ottawa, Calgary, Saskatoon and Regina.
In Regina, the flat farm economy has dampened consumer confidence, and house sales are down.
In Kanata, the high-tech hub for Ottawa, demand and prices for two-storey homes are flat after extensive job cuts.
For sellers, the market is theirs in Winnipeg, Halifax, Vancouver and Victoria.
Renewed confidence in a new government in British Columbia is sparking house sales there after years of low activity, according to the Royal LePage survey.
Your own reality
All this theory and survey work is worthwhile knowing. But whether you buy or sell first depends not just on trends, but factors unique to your situation.
Here are some “reality check” questions:
- How quickly is your current home likely to sell?
- What can you current home realistically sell for?
- How likely and quickly will you find a new suitable and affordable home?
- Can you cope better with interim or bridge financing-or interim housing?
Assess the current market conditions and their impact on your personal plan. Find an experienced real estate agent whom you trust and who specializes in marketing homes in your area.
Resist acting on emotion. Look at all the angles, then decide when it’s right for you to put up the “For Sale” sign on your front lawn.
With files from Gita Levy, Century 21 Heritage, Toronto, and Marilyn Smith, Senior Writer/Editor, 50Plus.com.