Should I buy a new house first, or sell my old house first?

Post date: 2020-07-09 08:46:10

I own one home. I will be buying a new home. I'm fortunate to have cash on hand for a down payment. I can't decide whether I should buy first or sell first.

I own a condo in a desirable urban area (Home A). I want to buy a larger home in the suburbs (Home B). Due to an inheritance, I now have money on hand to put down a good down payment (20-30%) on a new place before I've even sold my own place. I'm a little stumped as to the order of operations here.

Pro of selling A before buying B:
-Can hold out for top dollar on A (this isn't super important to me, really. I will definitely make a decent profit, maybe very good profit, no matter what)
-Don't have to get a big mortgage to buy B, since I will have lots more cash on hand? Honestly I don't know how it works otherwise (if you buy B first, then get a chunk of cash from selling A. Do you just get a really big mortgage and immediately pay like 60% of it off?)
-Not stuck with two mortgages for any amount of time

Cons of selling A before buying B:
-Possibly needing to move out of A before I have settled on B. I'm familiar with renting back from the new owners, so I would ideally arrange to do that for a few months but hard to know exactly how long to plan for. I REALLY don't want to move into a rental and then into my "real" home, and I REALLY don't want to feel pressured to buy something I don't love just to avoid moving twice.

I have two little kids, so convenience is a factor for me. Due to this inheritance I've got some financial cushioning so a couple months of double mortgage (if that even happened) wouldn't be terrible.

Thoughts? What have you done in a similar situation?

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