This is one of the questions I hear most from homeowners who want to move: should you sell before you buy, or find your next property first? Both approaches have their advantages and their risks, and above all, they don’t suit everyone.
In 16 years as a broker in Montreal’s Southwest, I’ve guided owners through both scenarios. Here is how to compare your options, and how to decide based on your situation rather than a ready-made rule.
Sell before you buy: pros and risks
Selling first is often the more cautious option financially.
What you gain:
- You know your real budget before you start shopping, instead of estimating it
- You avoid paying for two properties at once (mortgages, taxes, insurance, heating)
- You negotiate your purchase without the pressure of a property still on the market
Risks to know about:
- You may need temporary housing, sometimes with two moves
- If you don’t find a home quickly, you risk rushing your purchase
- In a market where supply is limited, the type of property you want may take a while to appear
Buy before you sell: pros and risks
Buying first is appealing because you avoid being left without a home.
What you gain:
- You take the time to choose the right property, without a countdown
- You only move once
- You can seize an opportunity when it comes up
Risks to know about:
- You may have to carry two properties for a while
- Financing is more demanding, since the lender takes your current commitments into account
- The pressure to sell may push you to accept a lower offer than planned
If an offer comes in quickly in this situation, my article on the first offer you receive helps you keep an objective perspective.
A third path: lining up your sale and your purchase
Between the two extremes, several tools can help make both transactions line up. Their availability depends on your situation and your lender.
A condition on the sale of your current property
In your purchase offer, you can include a condition tied to the sale of your property. It protects you, but it can make your offer less attractive to a seller, especially when there is competition.Possession dates
Negotiating compatible possession dates is often the key. Depending on the case, it may be possible to agree with the buyer or the seller to shift a date by a few days or a few weeks.Temporary occupancy
Sometimes a temporary occupancy after closing is agreed in the contract. The terms are worked out with your broker and your notary, because they need to be properly framed.Bridge financing
Some lenders offer transition financing to cover the gap between the purchase and the sale. Terms vary from one institution to the next, so it’s best to talk to your lender early on.Sell before you buy or the reverse: how to choose
There is no universal right answer. These are the questions I ask my clients:
1- Can you carry two properties for a while, if things take longer than expected?
2- Are you pre-approved, and for what amount, given your current commitments?
3- Do you have a temporary housing solution, if needed?
4- Is your type of property in demand in your neighbourhood, or could the sale take longer?
5- What is your tolerance for stress? Some people lose sleep over two properties, others over temporary housing.
To go further on timing, I wrote about the right time to buy a property in Montreal and on the question of buying now or waiting.
How it plays out in Montreal’s Southwest
The choice also depends on the market you’re targeting. In the Southwest, supply varies widely by property type and neighbourhood: a condo in Griffintown, a plex in Pointe-Saint-Charles, or a heritage building in Saint-Henri and Little Burgundy don’t behave the same way.
If you’re looking for a rare type of property, buying first can make sense, as long as you have a solid selling plan. Conversely, if your property sells easily in your area, selling first gives you a more comfortable base. This local reading is what I do with you at the start of every file.
Don’t forget costs and preparation
In a sell-and-buy scenario, costs add up. Before deciding, calculate what you’ll have left after the sale by reading my article on the cost of selling a property in Montreal. Some lenders let you transfer a mortgage to a new property, which can change the bill: check with yours.
To see every step of a sale in the area, my complete guide to selling in the Southwest walks through them all.
Frequently asked questions about selling and buying at the same time
Can you buy with a condition on the sale of your property?
Yes, it’s possible. This condition protects the buyer, but it can make the offer less attractive to the seller depending on the market. It’s a point to discuss with your broker before drafting the offer.What is bridge financing?
It’s temporary financing that covers the gap between the purchase of the new property and the sale of the old one. Whether it exists and on what terms depends on your lender.What if my sale and purchase dates don’t match?
Several options exist: negotiating possession dates, planning a temporary occupancy, or arranging transition housing. What works depends on your file and the parties involved.Do I pay a mortgage penalty if I sell before I buy?
It depends on your mortgage contract and the sale date. Some lenders let you transfer the loan, others apply a penalty. A call to your lender gives you a precise answer.Torn between selling before you buy and the other way around?
Contact me today, and we’ll compare the scenarios that suit you best together.