Buying before selling?

[red sky]

Any thoughts on buying a house before selling your existing property? There is a fair bit of risk but it is my understanding that it is a sellers market and that these types of transactions are the norm. I guess it depends on your property and all but I imagine everyone feels that their property will sell fast because ___________.

[Boblobla]

I have wondered this as well. I want to build my next house but I don't want to have to sell until I can move into the new home.

[normtwofinger]

[fundmark19]

I bought before I sold but that was because I was given a 3 months until possession and was fairly confident I could unload my house in 3 months.

[red sky]

Well I may be in this position and am not too worried. I figured a lot of people go this route.

[Travis Munroe]

This is how I work it with clients:

Put your place on the market while searching. If an offer comes in before we find something else we explain that we need a 3 month possession and once we find a place and know what the possession is we can then prepare an amendment to the initial offer on your place to accommodate a earlier possession if the buyers choose.
If we find something before your place sells, again go for the 3 month possession and explain that you will make it sooner but just want your place to sell.
If the 3 months passes and your place is still for sale then you take possession of the new place and continue trying to sell your other (assuming you can carry the second mortgage for a short period of time) or look at renting it out on a month to month to cover costs however renters can make a sale more difficult.

[red sky]

So do the banks have to approve you on carrying both mortgages just in case your other house doesn't sell? Seems like a lot of people wouldn't be able to go this route if that is the case.

[Travis Munroe]

You do have to be approved on both mortgages.
Once a firm deal has been reached on your sale it is possible to set up bridge financing to take possession of a new place prior to giving up possession on your other property.