Sell first or buy first when you are downsizing
By Dan Jones ·
Bottom line: there is no universal right answer, and anyone who gives you one without asking about your financing is guessing with your money. Selling first means you know exactly what you have to spend and carry no second property, at the cost of possibly needing somewhere to live in between. Buying first solves where you are going but means carrying both, at least briefly. For most downsizers the sale is the larger asset, so a delay on that side hurts more. Ask your lender four questions before you decide anything, starting with whether you could carry both for sixty days.
I am Dan Jones, a REALTOR with Royal LePage Locations West in Penticton, licence number 1118346, licensed since 2004. I can tell you what your house is likely to sell for and how long it should take. What you qualify to borrow is a question for your lender, and it is the one that decides this.
There is a question that decides how hard a downsizing move is going to be, and most people answer it by accident. Sell first, or buy first.
Nobody can give you a universal answer. Anyone who does, without asking about your financing, is guessing at your expense.
What each one actually risks
Sell first and you know exactly what you have to spend. You negotiate your purchase from a position of certainty, and you are not carrying two properties. The risk moves to logistics: you may need somewhere to live between closings, and you may have to move twice.
Buy first and you have solved where you are going. You can take your time, wait for the right property, and move once. The risk moves to money. You are now carrying two homes, at least briefly, and if your sale takes longer than you expected, or sells for less, that gap is yours to fund.
For most downsizers the sale is the larger asset. That asymmetry matters. If the family home is worth $1.2M and the rancher you are buying is $750K, a delay on the sale side is a much bigger problem than a delay on the purchase side.
The questions that settle it
Ask your lender before you ask your REALTOR®:
- Can you qualify to carry both properties, even for sixty days?
- Does bridge financing apply to you, and what does it cost?
- Does the bridge lender require a firm sale before they will fund?
- What happens if the sale falls through after your purchase closes?
That fourth one is the question people skip, and it is the one that turns a stressful move into a genuinely bad year.
The part nobody plans for
The transactions are not the slow part. The contents of the house are.
Forty years in one home produces a volume of belongings that cannot be sorted in a weekend, and much of it carries decisions that are not really about storage. The workshop. The kids’ boxes that are still in the basement. The furniture that will not fit in eleven hundred square feet.
Financing can usually be arranged in weeks. Emptying a workshop filled over thirty years cannot. If you are thinking about this for next spring, start the sorting now, and give it triple the time you think it needs.
What I would tell you on the phone
If you can afford to carry both, buy first, because the emotional cost of being between homes at seventy is higher than the interest on a bridge loan.
If you cannot, sell first, and arrange a long completion or a rent-back with your buyer so you are not moving into a rental for six weeks. Both of those are negotiable, and they are worth more to you than the last few thousand on price.
Either way, walk the family home with someone who can tell you what a buyer’s inspector is going to find, before you list it. That is a separate conversation, and it should happen first.