Pros of Selling First:

• Financial Clarity: You know the exact proceeds from your sale, allowing you to define a confident and precise budget for your next purchase.
• Stronger Buying Position: Being a non-contingent buyer (with no home to sell) makes your offer much more attractive to sellers. In a competitive market, this can be the difference between winning and losing your dream home.
• Reduced Risk: Eliminates the danger of carrying two mortgages simultaneously if your old home doesn't sell as quickly as expected.

Cons of Selling First:

• The Pressure to Find a Home: You may feel rushed to find and secure a new property within the closing period, potentially leading to a compromised choice.
• Potential Interim Housing: You may need to arrange temporary housing (renting, staying with family) if the timelines don't align perfectly, which means moving twice.
• Market Uncertainty: If the market shifts rapidly upward after you sell, your buying power could be affected.

Strategies to Make Selling First Work:

• Negotiate a Longer Closing Period or a Rent-Back Agreement: Ask for 60-90 days of possession after closing from the buyer of your current home, giving you more time to buy without moving twice.
• Include a "Subject to Seller Finding a Home" Clause: This is less common in hot markets but can be negotiated to give you more security.
• Line Up Bridge Financing: Have a plan in place before you list so you can act quickly if you find a new home before the sale of your old one finalizes.

Pros of Buying First:

• No Pressure to Move: You can take your time moving from your old home to the new one at your own pace.
• Easier Transition: Ideally, you move directly from one home to the next without needing interim storage or housing.
• Secures Your Dream Home: You can make an offer on the perfect property the moment you find it without waiting for your own home to sell.

Cons & Risks of Buying First:

• Financial Risk (The Biggest Con): You risk carrying two mortgages if your original home doesn't sell quickly. This includes double mortgage payments, property taxes, insurance, and utilities.
• Weaker Offer Position: Your offer to purchase will typically need to be conditional on the sale of your current home. In a multiple-offer situation, sellers will often choose a firm, non-contingent offer over yours.
• Potential Price Reduction: If your home doesn't sell, you may be forced to lower the price to attract a buyer quickly, cutting into your equity.

Strategies to Make Buying First Work:

• Ensure You Qualify for Two Mortgages: Speak with your mortgage broker beforehand to understand if you can financially sustain both homes for an extended period.
• Use Bridge Financing: This short-term loan uses the equity from your sold home to cover the down payment on the new one before the sale closes. (See section below).
• Price Your Home Competitively: To sell quickly, your existing home must be priced accurately and marketed aggressively from day one.

What it is: A short-term loan that "bridges" the gap between the closing date on your new home and the closing date on the sale of your old home. It provides the funds for your new down payment before the sale of your current home is complete.

How it works for Edmonton homeowners:

1. You have an accepted offer on your new home.
2. You have a firm, unconditional sale agreement on your current home.
3. A lender provides you with funds to cover the down payment on the new home.
4. Once your old home sale closes, the proceeds are used to pay off the bridge loan.