Moving from House A to House B
Updated: Aug 14
Over the past seven years, I’ve supported dozens of clients who are moving from one home to the next. The very proposition of selling one home and buying another - the move, the money, the change - can be overwhelming. When clients approach me, most bring optimism and enthusiasm (and a healthy dose of anxiety and fear) to the table.
I hope to ease the path by simplifying it, so allow me to explain the two most common paths for accomplishing the BIG task of selling House A and buying House B.
Your two options are to 1.) buy first, then sell, or 2.) sell first, then buy. Which is right for you? Each path has benefits and drawbacks, so consider the following pro’s and con’s, and decide for yourself!
Buy First, Then Sell
In this path, you stay put in your first home while you launch a search for the next home. You have arranged the financing you need to make a competitive offer and you have the benefit of searching for the perfect House B from the comfort of your home.
Pro’s:
You only move once! No temporary housing (or associated cost) needed, and the cost of moving and storing furniture is limited
You only move when you have identified and acquired House B, which can be an emotional boon. Having the bright, shiny new home in your future can pull you forward in time and enable you to keep your eye on the prize.
You eliminate the uncertainty that can come when you’re in limbo…with this path you know what house is a real option at all times - the one you have or the one you just bought
Con’s
The costs here are not nothing. You’re holding two mortgages for a period of time (while you prepare and sell your first home and while it’s on the market + in escrow*), and the cost of the second mortgage can be substantial if you need an expensive loan product like a bridge loan. The most affordable path (if available) is to take out a second mortgage
It’s prudent to be conservative in your estimates of value…so when you’re deciding on your budget for House B, you want to choose a “safe” estimate for the likely sales price of House A. I worry that some clients will be so conservative that they cut themselves short on the House B purchase, thinking that they can’t afford more. But when House A sells for gang-busters, they will wish they stretched on the second purchase and got that fourth bedroom, or large lot, or big view that they had always dreamed of…
In my experience, this path is a good one for people for whom the thought of moving twice is untenable, people who are downsizing (so that the exact value on House A isn’t as important), and people who know that having House B as a real, concrete thing is important for pulling them forward through the process.
*When I work with clients in this category, it’s important to move fast and reduce the amount of time that they hold two mortgages…most of the time I can deliver on 2-3 months of carrying costs and their first home is completely sold by the end of month three
Sell First, Then Buy
In this path, you sell your first home and only after the dust has settled and the proceeds are in your bank account, do you launch the search for House B.
Pro’s:
You know EXACTLY how much you have to spend on House B, no guessing game
You only have one mortgage at any given time, so the cost of borrowing money is reduced
You are able to time the move so that you sell when the market is at a high and then you wait for a calm moment in the market to buy at a slight advantage**
Con’s
The most glaring barrier to this path is that you’re moving twice. Two moving companies, sometimes storage, likely temporary housing like and AirBnB. While the cost to hold two mortgages in the first path is the primary expense there, the temporary housing and moving is the primary expense with this path
Once your first home is sold, you don’t have certainty for when you’ll find House B. You may anticipate a ~3 month search, but the real estate market is unpredictable and no one can promise a specific timeline, or that the perfect House B will materialize in your price point. So you need flexibility to make this path work
In my experience, the Sell First, Then Buy path is best for people who need the certainty of the value of House A in order to feel comfortable stretching for the House B purchase. The risk mitigation of selling first overcomes the discomfort of moving twice. Folks who choose this path have to adopt a degree of flexibility as the timeline for acquiring House B is unknown.
**My caveat here is that the market goes up, goes down, and while we can speak intelligently to the past trends and seasonality, we can’t predict the future. So understand the risk involved in banking on the future and be prepared to shift if needed!
My Hot Take
There is no one way - or “right” way - to move from House A to House B.
I find it comes down to your personal relationship with risk and your tolerance for the discomfort of moving. I’ve always said that buying and selling a house is like a job, so when you’re doing both at once, it’s extra. So think about what you need to come through this big process whole and in one piece.
Lean on me if you want to explore what’s possible for you! I’m a call away.
