One of the trickiest parts of moving up (or downsizing) is timing. Sell too early and you might be scrambling for temporary housing. Buy too soon and you might be carrying two mortgages. Here's how to think through each approach.
Selling First: The Lower-Risk Path
Selling your current home before you buy gives you a clear picture of your budget. You'll know exactly how much equity you're walking away with, and you won't be juggling two mortgage payments. The downside is that you might find yourself in a gap — your home is sold but your next one isn't yet locked in. Some buyers bridge this with a short-term rental or by negotiating a rent-back agreement with the buyers of their current home.
If your next purchase depends on the equity from your current home, selling first is often a practical necessity. Lenders may also require it if your debt-to-income ratio can't support two payments at once.
Buying First: The Smoother Move, If You Can Swing It
Buying before you sell means you can take your time moving and avoid the pressure of a hard deadline. You're not rushed out of your current home the moment you hand over the keys. The obvious catch is the financial exposure: you're responsible for both mortgages until the old home sells. That works for some buyers and creates real stress for others.
If you go this route, make sure your budget has room to carry both payments for several months — markets can be unpredictable, and a home that you expect to sell quickly might sit longer than expected.
Making Your Offer Contingent on Your Sale
A middle-ground option is writing an offer on a new home that's contingent on selling your current one. This protects you from being stuck with two properties indefinitely. The trade-off: sellers in competitive markets often prefer offers without contingencies, so this approach can weaken your position in a hot market.
A Third Option: Keep It and Rent It Out
Some homeowners decide not to sell at all — they turn their current home into a rental property and buy something new. This can be a smart long-term investment, but it comes with real responsibility. Being a landlord means handling maintenance, vacancies, and tenant relationships. If that appeals to you, it's worth talking to a property manager and a financial advisor before deciding.
The Most Important Factor
Your lender should be one of your first calls before you make this decision. They can run the numbers on what you can carry, how much equity you have to work with, and what loan options fit your situation.
Talk to First Look Home Loans about your options — we'll help you map out a timeline that makes sense for your finances.
