It depends!

It depends on your personal preference, what type of home you are selling, and the type of home you are buying, as well as the kind of market you find yourselves in.

From a financial point of view, there is no doubt selling first makes the most sense. But, putting your house up for sale before finding your new home can be a hard thing to do. Also if you are looking for an unique home, this is not practical.

The ideal situation is to go out and clarify what your options are .  Look at house styles, neighbourhoods, prices, etc. If you find a few places that meet your criteria and you’d be happy living in, then this should give you the confidence to put your home up for sale, sell, and then buy. 

If you were looking for a unique property, then selling first may not make sense. But here is the problem - if it’s a unique property you’re looking for, chances are that type of property is in high demand. This would mean you would have to buy conditionally on the sale of your home, or buy firm. 

Few listing agents would accept a conditional offer in the current (strong sellers) market, particularly if the listing is new on the market. Also in a strong market, there is a good chance that an accepted conditional offer will be "bumped"

Although we don't casually recommend buying before you have sold, many of our clients have done it, and I have done it myself- we bought firm in a very tough market! By the way, all of our clients who have bought firm, have sold and closed in time.

If you don’t want to let go of your home before you find your new place or if your dream home comes up sooner than you expected, then you find yourself in this situation.

Let's look at your three options:

Selling first

Upside

You know exactly how much money you are working with.
You have the uncertainty and pressure of the selling process behind you.
You have greater negotiating strength at the buying end.
You are minimizing your financial risk.

Downside

You haven't found your dream home yet. Don’t get that homeless feeling!

Strategy

• Negotiate a longer closing on your home, with a flexible closing date clause. We do this often. The flexible closing date must be negotiated into the offer.
• Remember every day on the MLS system is a new day. There may be nothing for days or even weeks and then a couple of good homes can pop up at the same time.
• Be patient. Don’t be in a hurry, and don’t be too anxious. My concern when a family sells first is they get anxious to buy - stats say that people typically buy within 2 weeks of selling their home. Fight the tendency to buy just for the sake of having the issue resolved, and have faith that the right house for you will come along.
• As a fall back plan, consider storing your furniture and finding a short term lease. These leases can usually be found. Sure it’s very inconvenient especially with children, but this is a worst case scenario and rarely happens.

• Be prepared that your offer may be bumped. Even if it’s just a little bit of time, the conditional offer gives you the opportunity of putting your home on the market to test the waters.
• If you are faced with having to firm up, and your home has not yet sold, you can make a more educated decision, because you should have a better sense of where your house will sell and hopefully you will have more confidence to move forward.

• Negotiate as a long a closing as possible with the vendor with a flexible possession clause, to take the pressure off you while selling your home, and to give you flexibility to accommodate buyers.
• If you buy firm, you must be prepared to estimate on a conservative value on your home, particularly if your finances are tight. There is a range of market value and you should work your figures based on the conservative end of that range. You wouldn’t want any surprises. It’s not a question of whether you will sell or not, it’s a question of for how much and in what time frame. Time on the market is directly tied in with price.
• Having bought firm should not affect the asking price of your home. We believe accurate pricing is the best strategy to get top dollar under any circumstances.
• Realize having bought firm, you will become what we call a motivated seller. In our experience, this influences the negotiation process. After the offer has been back and forth several times, you might say, "well, maybe we could squeeze a thousand or two more, but let's just do it!"
• Worst-case scenario, you must be prepared to carry two homes. With careful planning, correct pricing and good marketing from your agent, this should not happen!
• Check out average time on market in your area, and consider that the average closing period from contract to closing is 60 to 90 days. Also, consider the type of market you are working in.