Should I sell my current home before buying another one?

Why selling first often provides more certainty

Once the current home has a firm sale, the owner has a clearer picture of the actual selling price, mortgage repayment, expenses, available equity, transaction dates and a safe budget for the next purchase.

This reduces the risk that financial pressure from one transaction negatively affects the other.

When I generally lean toward selling first

1. The equity is needed for the next purchase

Many owners need the sale proceeds for their next down payment. Selling first confirms the amount instead of relying on an estimated value that has not yet been tested by the market.

2. Financing is tight or uncertain

If qualification depends on eliminating the existing mortgage, buying first may not be realistic. Before acting, discuss qualification while carrying both properties, down payment, mortgage penalties, portability, bridge financing and transaction dates with a mortgage professional.

3. The homeowner wants less financial risk

Selling first reduces the possibility of carrying two mortgages, two sets of taxes, insurance, utilities and maintenance. It can also prevent the seller from feeling forced to accept an unsatisfactory offer because the next home has already been purchased.

The main disadvantage of selling first

The owner may sell without immediately finding the right replacement. Options may include negotiating later occupancy, renting temporarily, staying with family, using storage or waiting until the right property appears.

The signing and occupancy dates do not always need to be identical, but every arrangement must be clearly written and coordinated with the parties and notary.

When buying first can make sense

1. Financing and reserves are strong

Buying first may be manageable when the purchaser qualifies while still owning the current home and can comfortably cover overlapping mortgages, taxes, insurance, utilities, maintenance and unexpected delays.

2. The current home should be highly marketable

The approach may be more reasonable when the present property should attract strong interest based on its price range, condition, location and competition. Even then, its timing and selling price should not be assumed; obtain a market evaluation first.

3. A rare or ideal property becomes available

A financially prepared buyer may decide that securing a difficult-to-replace home is worth the added timing risk. The decision should still be supported by a realistic plan for selling the current property.

What about an offer conditional on selling?

In Quebec, the appropriate provisions of Annex R – Residential Immovable can make a promise to purchase conditional upon the sale of the buyer’s current property. This can protect the buyer if that property does not sell according to the agreed terms.

However, the condition may make an offer less attractive, particularly when competing with buyers who have no property to sell. The wording, deadlines and consequences require careful attention.

What is bridge financing?

Bridge financing is short-term financing that may help cover a gap between purchasing the next home and receiving proceeds from the existing home’s sale. It is commonly considered when the present property has already been sold firmly but closes later than the purchase.

Availability is not automatic. Eligibility, interest, fees, security and required documents vary by lender, so written confirmation should be obtained before relying on it.

Why coordinating the dates matters

1. Signing date for the current home’s sale
2. Occupancy date given to its buyer
3. Signing date for the next purchase
4. Date the owner can occupy the next home

A mismatch can create financing, storage, moving or temporary accommodation costs. Planning makes those consequences understandable before the contracts are signed.

Selling first versus buying first

My advice to West Island homeowners

1. Obtain an in-person evaluation of the current home.
2. Ask a mortgage professional to model both scenarios.
3. Calculate the cost of carrying two properties.
4. Consider how difficult the next home may be to find.
5. Decide how much financial and timing uncertainty is comfortable.
6. Coordinate the selling, buying, signing and occupancy strategy.

For owners who need their equity, have uncertain financing or want to minimize risk, I generally lean toward selling first. Buying first may offer flexibility when financing and reserves are strong, the present home is highly marketable and carrying both properties is comfortable.