Your old home gives you a level of comfort and convenience that may not seem so to others, but given that you have lived in it for years, you know the quirks and have adjusted to them. It means if we consider the emotional POV, buying an old home for a new one can be a tough call.
What about the financial aspect of it? There are multiple considerations for decoding the monetary part of it. If you are taking a home loan, the EMI is one of the significant considerations. If you have a surplus, how you plan to utilize it are essential considerations to make while deciding if you should sell your old home for a new one.
This article discusses the considerations to be made while deciding if you should sell your existing home for a new one.
Finances are the key.
Let us accept that most middle-class people do not have the luxury to own and manage two houses simultaneously. So if you are in the same league, if the proceeds from the sale of an old home can significantly reduce your home loan EMIs for the new one, it may be feasible for you to sell the old house. We suggest you use a reliable home loan EMI calculator to understand the difference it makes and your home loan eligibility in either case.
The house you have your eyes on is at an unbelievable price
Sometimes you can come across a home that is priced too well for you to let it go. The owner’s daughter is shifting to another country and wants the parents to join. Medical conditions or any other emergency can be why they are incredibly motivated to sell.
Now assess if the house meets your living criteria, such as the locality, distance from office and school, and others. It makes enough sense for you to sell your old home and shift if it does.
Sell if you are in a seller’s market.
In a buyer’s market, there are a lot of homes already on sale, and the wait time is over six months. It also means that the buyer will have the upper hand while negotiating the prices. In such a case, the best thing is first to list the old home and assume that you will have to wait to find the right person willing to buy it at the price you deem justified.
In contrast, if you are in a seller’s market, it means that good houses are scarce, and the wait time is around a month. In such cases, you can have your say in the final pricing. So even if you are selling your home quickly, you are likely to wait longer to get the right home. It means that looking for a new place that you can call your home should be a priority in such cases.
You get additional negotiating power but at added risk if you sell your old home for a new home.
When you plan to sell your old home for a new one, you get more negotiating power while looking for the latter, as there is no pressure to manage them both together. Instead, you know you will sell the old one or are already in the process.
But there is a catch. If you have already sealed the deal to sell, you may have limited time to find the new one or be prepared to take a bridge loan or rent a place. The key to deciding is to understand your finances and home loan eligibility and then choose the right way forward.
