Should I Buy or Sell First?
How you approach the "buy first or sell first" issue depends upon your unique situation. Each alternative has its positives and negatives. To evaluate which alternative is best for you, consider the effect each scenario will have on your finances, negotiating position and moving timeline.
If you choose to buy a new home before you sell your current home, you risk having to carry two mortgages until your old home sells. A bridge loan can ease the strain of double mortgage payments, however, you generally must have sufficient equity in your current home to qualify. Of course you could make the purchase of your next home contingent upon the sale of your current home, but in a strong market, it's not likely that a seller will accept such an offer. The advantage of buying a home before you sell your current home is that it gives you more time to look for the home that best meets your needs without the pressure of having to move.
You may be in a stronger bargaining position if you put off serious new home shopping until after you've accepted an offer on your current home. You'll have a better idea of how much equity you'll be able to carry over to your next home and you won't have to make the purchase of that home contingent upon the sale of your old home. Of course, if sellers know you have a limited amount of time to purchase, it can be more difficult to negotiate a good price.