Buy First and Then Sell – Or Vice Versa?

The issues you raised are identical to my own quandary. My feeling is moving is stressful enough, moving when you don't know where you are headed just adds insult to injury. Hotels, rental properties for which you might be held to an annual lease and then you incur two moving costs, furniture storage fees, moving costs for items that may not work in your new home, all add up to additional considerable costs. And don't kid yourself, living in temporary quarters is stressful. I might say if you can swing two mortgages and maintain two households for a few months, then the easiest and least stressful way to go would be to buy first. You could try making your purchase contingent on selling your existing home but in this market that may not work. But if you get your existing home ready to sell so it can go on the market as soon as you sign a contract for your new home, you may luck out with the timing. Either way it is going to cost you something. And you have to balance that against the stress level. Good luck.

We are currently living in an apartment after thinking the smart thing to do was to sell our house first then figure out where we want to retire. My advice is to NOT sell your house until you really know where you are going. We have made multiple visits to the areas we thought we wanted to live in (coastal Carolinas) and, six months later, still have not found where we want to be. I wish every day I was still in my comfy beautiful house instead of this miserable apartment at this stage of my life. At this point, we will likely end up buying something somewhere/anywhere just to get out of the apartment. Oh, and I might add, this plan has proved to be very expensive and very stressful. At a time when we should be enjoying ourselves, our life is consumed with finding a place to live.

We've decided to sell first. We've been in the situation of having two mortgages and though we were lucky and sold & settled fast we both said we wouldn't want to do that again. To add to the mix, we have three dogs and a cat which might make it difficult to find a place to rent. Even though selling, moving into temp housing and storing our belongings will be stressful we feell it will put us in the best financial position to know what cash we will have to work with and could buy/settle quickly. A little spent is worth our peace of mind. A -- please dont buy anything just to get out of your present apartment. Remember, its only temporary...take your time and try to enjoy the process otherwise, you might find yourself moving again after making a hasty decision. Try to think of it as an adventure :)

ps: Even though we hope to have no mortgage we've been told by several it will be easier to get a mortgage while still working even if you have a good retirement/annuity. So, that too is part of our plan in case we need to get a small mortgage. Sell the present home, rent for a while, buy new place, retire. Hope this helps!

Yup, we are in the same boat. Need/Want to sell our current home, retire, rent/buy, and move...it's stressful just thinking about all at once let alone developing and executing a realistic plan to make it happen. For us we know where we want to move to and selling, retiring, renting/buying moving sounds like the least stressful as it allows us to focus on each step, one at a time. There are pluses and minuses for rearranging the steps e.g. retiring, buying, selling, moving; or buying, selling, retiring, move; it's going to be a personal choice. Just make sure it's a decision and order you want to do and are committed. We, like someone previously mentioned, are trying to look at it as an adventure, staying in the moment, as things will go wrong, and don't get to far ahead of ourselves. Best of to all!!

We currently live in Kansas and found our dream retirement home in Little River, SC. The market there in August of 2013 was fantastic as it was a buyer's market. We paid most of the purchase price in cash. Then we took out an equity loan on our current home (we have no mortgage on this property in Kansas) to pay the rest of the purchase price. We hired a property management company in SC to find a qualified renter for us. They found us great tenants and got a 3 year lease for us. We still have about 3 years until retirement so this worked out perfectly.

The bonus for us is that buying when we did secured us a great home at a great price. We have dream renters that are paying us $1,460 a month for 3 years. We couldn't have gotten that kind of return on any other investment.
And we know our home is being taken care of and not sitting vacant until we actually get to retire. When we sell our home in Kansas, part of the proceeds will pay off the equity loan and we will still have a large lump sum to take to SC. But until then we have a comfortable place to live.

Our plan is to start looking in FL once my wife retires in July 2014, I am already retired. With family living in FL we can stay at no cost and visit many places that interest us. We want to buy a new home so I think buying with the contingency that our current home is sold first will work out. WIth good credit, putting down a minimum of 20% and having a pension I would think getting a new mortgage when retired should be possible as long as it is within your budget.

We debated this same question, and in the end decided to buy first and sell later. We're about 3 years away from retirement, and based on travels and research had decided we wanted to relocate to north Idaho when we retire. Our rationale for buying early was based on about 3 years of following the real estate market up there, and our conclusion that it wasn't a very dynamic real estate market, and we would probably reject a lot of properties that might meet our objective requirements. Based on that, we felt that if the right place was available, we should consider buying now.

We were prepared to buy early and deal with having a vacant house. The vacation home/vacation rental market is active enough that there are services that will monitor and maintain a home for a reasonable cost. As it happened, the house we fell in love with was rented. The tenants plan to buy in the area, but want to rent for 2-3 years before doing so. This turned out to be an ideal situation for us.

Like Dave, we debated this and came to the opposite conclusion, mostly because we didn't want to leave a house vacant or have renters. We had a bad experience with renters when we lived overseas for a few years. We also know where we are moving, so I keep track of real estate listings there. There are always at least 10-15 houses available that would suit us, so I feel confident that we can sell our home and buy another house before we close on the sale.

I worried about this question for a year..how to I sell my home and buy a new one? I decided to have a broker I knew give me advise. Then I checked this website where tol live cheaper. I found Heritage Shores in Delaware was my choice after going to delaware and looking at a few communities. Now where to live was next. My sales rep in HS told me that there was a couple who wanted to rent their home for 5 months..perfect. This actually happened the same week I got an offer on my house. I am here watching my new home being built is exciting. I did make a mistake in taking to much furniture and putting it into storage which I may not use. But it seems to be working out thank God,

I'm going to sell first, so I can see how much I net out. I can then evaluate how much of that amount I'm going to want to use for a retirement home. I plan on getting an apartment for a year. I'll store some things from the house like artwork and books but most of my existing furniture is unlikely to make the trip into retirement with me. What the kids don't take, I'll give it to a charity when the house sells. I view my upcoming year in an apartment as an adventure. It will be freedom from home ownership for awhile, and it will be nice to have the house money sitting in an account while I figure out what I want to do. It will give me flexibility if I decide to build, or if I want to renovate a property. I am looking forward to getting new stuff for my next stage of life, and starting over.

I would like to warn some of you who plan to not rent and leave your house vacant. My Mom passed away last year. I sold her car and called the insurance company to take the insurance off the car. They asked me why and I told them my Mom had passed away and that I was selling her things. Then they asked me if the house was vacant. I said yes. Uh, oh...that opened a can of HUGE UGLY WORMS! They told me they don't insure vacant houses! My Mother had this insurance through AARP for probably twenty eight years! They dropped me like a hot potato. They did let the insurance stay till the policy ran out. So I had to look for new insurance for the house while it was on the real estate market. I found this policy and it cost almost $1500 for 6 months. I would get a refund if the house sold but it was a three month minimum policy. The policy was bare bones and didn't cover half of what the original policy covered. They had an inspector come out which cost $85.00 to take pictures of the house and grounds. That was a non refundable fee. There were other fees that were not refundable. So when I called the agent and told her the house was sold just shy of 3 months she said she would process the refund. Well originally she told me I'd get HALF back and half in my world is $750 but half in the insurance world is maybe $525. So it cost me close to $1,000 for 12 weeks insurance. What a DEAL! It has been over a month and I have not received the refund yet. Funny how they need your money right away to process the insurance but to get the refund takes over a month and still waiting. I was really mad about all this and told the insurance company I was going to get a hobo to come and live in the house so I could get normal cost insurance! They didn't like that much! So be very, very careful about leaving a house vacant! Insurance companies HATE vacant houses and you pay through the nose at the privilege of paying them bookoo bucks. If I hadn't sold the car they wouldn't have known the house was vacant, however, if something had happened and if they found out the house was vacant I am sure they would have not paid to fix the house because there is probably a clause in the contract that says they don't cover vacant houses. Vacant houses are very bad news!

Ted, I am glad to read your comments. It is exactly how I feel. I am planning to sell my home, will have a garage sale or give away what does not sell. I know where I am going, to warmer weather, but not sure exactly the spot and then look for a place to rent till I find my home. With 2 dogs and 1 cat it will be a little confusing but as you said, looking forward to this new time in my life. Have to make it an event rather than work. Thanks for reinforcing it for me.

At least it is good to know that we are not alone in this quandary!! It is a good idea to think of all of this as an adventure just like we recently thought of getting stuck in the Philly airport for 36 hours as an adventure! And Louise, you are exactly right. No insurance company likes an empty home. If we buy before we sell, we will probably stay in our home until it sells and perhaps any repairs or improvements we wish to make could be done at that time. Except it will be hard to do that since our home is in Florida and our new home will be out west. Complications at every turn.. on to our adventure!

We were lucky enough to be able to purchase our new home, to be built, before we sell our present home. One thing that we were warned about repeatedly, and it's something someone previously touched on, was that you need an income if you want to get a mortgage. It is not adequate to simply have the savings in hand. This is a different mortgage market, so make sure to check it out in advance.

Our home is mortgage-free, and we intend to use proceeds to purchase a house. Given the fact that homes in our area rarely sell earlier than 120 days as due to the price of gas, desirability has diminished. We will significantly downsize, loping off over 1,000 sf, as we rarely use that much of our house at present. Homes sell quicker if they are furnished, so I doubt I would relocate until after the house sale closes.

I'm not adverse to living in a furnished rented house until our new home is built, but once our home is on sale, we will get a construction loan for a new home. If we are lucky, we will only have the one payment, or at worse, a short-term lease and the construction loan. We've been "homeless" waiting for a new home to be completed twice already, so a third time will not be a problem.

There is a new service in our area called "PODS", where you move your belongings into a container, the container is loaded on a truck and stored without moving goods in and out of the storage container. This is how we will go if our new home is not ready in time.

We had looked around for four years and found our dream house in the location we wanted. (Old house, on lakefront property.) We saw it and signed papers the same day.. For us, since our current home is paid for, it seems to work so far. We are gradually moving things to the new house, and several months before retirement, plan to put this house on the market
I would not recommend two mortgages, though. That would be stressful and we would not have done that.

This comment came in from Linda. We have redirected it to this Post since it fits better here:

Does anyone know where I can get information regarding the price appreciation or depreciation for Manufactured homes in active adult communities? I want to determine if they are a good or bad investment. Any experience or opinions are welcome.
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And after that question was posed Janice was kind enough to answer her:

I had once looked briefly into manufactured forms. It seems they depreciate. I also had the impression that even if you buy a manufactured home you have to lease the land. I believe there is also some kind of homeowner association fee. My concern with the lease and the fees is if they rise to high and a person can no longer afford either they will lose their home.

We have a manufactured home in southwest Florida and own our land. There are others like that, but at most of them, the lot you are on is leased. We searched a lot online to find communities before we looked at them in person.
All have homeowners associations, and the fees can be high; $800 to $1100 a month at the more upscale ones. We have seen large, two bedroom homes at the higher fee places being sold for under $10,000 just so they could get rid of them and get out from under the fees.

See my comment in the Tell Us Where You Are Living in Retirement about Mfd homes

Linda,
Whereas manufactured homes will give you more home for the money, the biggest difference is that site-built or modular home will appreciate in value while manufactured homes depreciate in value from the day they are delivered. Additionally, many banks will not offer a mortgage on the resale of a manufactured home. Much to think about.

Go online and do the research; it’s easy to find.

by ella — October 27, 2014

Tomquickel, if u don't mind. Where are you in SW Fl, why did u pick that area, what would land and manufactured home cost and above all what are your Real Estate Taxes? Nosey eh? Even with homestead exemtion Fl (IMO) still get you on the Real Estate Taxes as compared to say NE TN.

Hopefully I have not been tooooooooooooooo nosey?

tks, Robert

Found a Bank and credit union that offer mortgages on new and resale manufactured homes. Cannot find any web sites with data on HOA fee and sale price increase or decrease.. Any suggestions?

linda, thats amazing that u found a credit union that will mortg a manufacuted home or mobile home. Mine won't and have yet to find one that does!!
IMO = all such home depreciate with time especially in parks that have a lot rent that continually goes up at the park owners discretion - unless they have a yearly cap which most don't. I know of one park (we escaped b4/lol) that the lot rent went up to almost $800.00 a month and people were practically giving their homes away just to get out of the lot rent. $800 x 12 = $9600.00 - ha u could live in New Jersey or New York (RE taxes) for that kind of money.

Buon Fortuna - Robert

Robert,
We are in Estero, FL, between Fort Myers and Bonita Springs.
Picked the area because it's warmer here and more affordable; 20 minutes to nice beaches and close to airport.
You can buy empty lots for $40,000, or homes from $60,000 to $100,000.
HOA fees are only $320 a quarter, which includes Comcast cable, water, sewer, and garbage.
Real estate taxes for our 854 sq. ft. unit is $985.

Robert: I don't know when you last checked rents in NYC but you couldn't even get a studio apartment in Brooklyn never mind Manhattan for $800 per month.

Stacey, probably true but I was referring to RE taxes. When u rent u do not pay RE taxes - but who knows about New York and New Jersey/lol
My sister inlaw lives out on Long Island. Her home is paid for but she is paying over $10,000 a year in RE taxes. She chooese to stay there because of family but then she can also afford it. We can't and actually would not if given a choice.

tomquickel, tks for the info. The total works out to $189.00 per month for taxes and HOA. for those who have a mortgage this would of course be in addition to. Is this in a mobile home park - I would suspect it is with a HOA fee but not sure. Do you wish to share the name of the park with me. If not - I understand. Again tks for ur reply.

We are currently renting a one bedroom apartment, having sold our 4 bedroom colonial very quickly. We are using this time in the apartment to relax and take our time traveling to Florida, Arizona and Nevada before deciding where we want to settle. I'm glad we don't have the pressure of caring for our large home while we search. It is very nice to leave for a week and not worry about a thing. We just returned from SW Florida after a week of looking. We were surprised at the high prices for new homes. The advertised prices DO NOT include lot premiums, pools are an additional $40,000 to install, and watch those HOAs (one neighborhood had $600/month!). Heading to Arizona in January. I don't want to feel pressured to just buy something to have a home again, so we are being very particular.

tomquickel, if possible I would like the name of the park also, that sounds very reasonable and I like Estero although I heard it was getting crowded there?

I feel like Ted and Lisa. Retired, we want to sell our large home on 1/3 acre of yard-care intensive landscape and unused pool. The constant maintenance is now too much for us. During our house hunt for a smaller home in a new 55+ community, we quickly discovered that when selling agents learn you are depending on money from the sale of your existing home - they give you the "bums rush" and suggest you return when it's sold. They seem to have enough "ready buyers" to make immediate money off of. So, we're selling our house and will rent an apartment and hunt for the best location for us to buy. Bottom line, I cannot buy before selling.

The mobile home park in Estero is Cypress Bend. It's a 55 and older community with heated pool, tennis courts, shuffleboard, bocce ball, and horseshoes. A large community center houses a meeting hall, kitchen, exercise room, library, laundry, and billiards room.
While Estero may be getting crowded, there aren't many places in SW Florida that aren't getting more construction, developments, and people.

Fortunately we could purchase a retirement home before we sold our rural home and property of 30 years. After my husband retired and I was working part time, we spent almost two years using our RV in short trips to explore retirement options. We also started de-cluttering, knowing it was a massive job, and making a few home repairs. Even with all of the prep, once we purchased our retirement home 400 miles away, it took 5 months to remodel and move, then another 6 months for the old house to sell. We ended up renting storage units temporarily at both locations and making numerous trips - thank goodness for the RV! If I had it to do over, I would have gotten rid of more stuff sooner. Sentiment and procrastination made the whole experience much more difficult. However, purchasing the new house before selling the old one was the way to go for us and I'm glad we were able to do so.

Everyone over 55+ need to listen to George Carlins take/video on "STUFF". Language a little vulgar but absolutely Hillarious and Oh So True.

I recenlty realized that for years I have been carrying books I read years ago from place to place (we moved a lot in the last 20 years). They weighed a ton and no one else was reading them so I DONATED MY STUFF and actually sold a few on Amazon.

Agreed, STUFF sucks! Just filled up another dumpster and it gets taken away today. Hub cleaned out two barns and garage but they are still FULL! We built our house in 1975 and have never moved! It is just the two of us and no children but somehow we filled up a 3 bedroom home with a 2 car garage and 2 small barns. Not to mention, my Mom died last year and we brought home some of her things. Not a lot but it still is not weeded out yet. Hub worked at a big corporation in a maintenance department. The company was always renovating and he dragged home all kinds of things that were scrap! Now their scrap is my scrap! GRRRR! When I owned my timeshare I was always amazed how minimalistic living there was. The unit slept 6 and the kitchen was equipped with just 6 of everything! If you ran out of forks, heaven forbid, you'd have to wash them! I wish I could program my brain that way. Instead I have a cabinet full of coffee mugs and what do I use? The same ONE every day, none of the others! Two sets of dishes...why? Half the time I use paper plates! I keep telling Hub to tell himself "LESS IS BETTER"!

Hub and I saw George Carlin years ago at a live performance and he did the gig with 'STUFF' and it was so hilarious and so true! LOVED IT!

I swear STUFF grows like weeds. You get rid of one; and ten grow back.

Some suggestions on getting rid of household clutter would be to sell some of it on eBay or Craigslist. I prefer eBay because I don't have to deal with people coming to my house. It is pretty easy to list your stuff on eBay. You do need to set up a PayPal account to collect the money from your sale. Etsy is another place to sell Vintage/Antique things. It can turn into a really good hobby. If you are handy at making handmade things, Etsy is the place to list your items.

If you are brave...have a tag sale. Ugh, I like to go to them but I will never do another one again! Way too hectic! I had tons of people and it was insanity!

And in the end if no one buys your STUFF, give it to Goodwill or another thrift store, get a donation receipt and you can take it off your taxes.

Bubbajog is correct, STUFF grows like weeds...time to pull the weeds and get rid of them!

Oh, one other thing I forgot to mention. We had an abundance of house stain, paint and spray cans of paint we had accumulated but was still good stuff. Some were full and others were half full. We were able to donate them to an organization something like Habitat for Humanity that rehabilitates homes for elderly and the poor. I am sure they take anything that would help rehab a home such as nails, lumber, copper pipes, wallpaper. We all have STUFF that we have used but not the whole thing and then the half THING goes to the basement to live the rest of it's life until we toss it out. Get rid of it now! LOL! Plus, they will give you a receipt that you can use for your taxes.

There is also an organization in our area that picks up donations right at your home. We donated a couch and loveseat and some other things that were cluttering up the place. They charged us $55 to take it all away but the STUFF will be given to needy people free of charge and is tax deductible too! I think the $55 was to cover gas and to pay the two guys who did the pick up. I do believe in some areas, Salvation Army will pick things up and Veteran Associations will come to your home and pick things up. Sometimes Animal Welfare will ask for donations so they can have a tag sale to raise money.

Get rid of your junk to a good cause!

Except for socks, Bubbajog. They diminish in halves!

Absolutely Ella: I have a drawer full of halves.

So do i! We should get them together and make them whole!

I am still working long hours, and don't have the time to sell stuff on Ebay. Some stuff went to Goodwill, the Salvation Army picked up some rooms of furniture, and I used one of those trash companies that will come to your house and pick up stuff (promising to recycle anything). I took chemicals, paints, aerosol cans and other stuff from the garage to a hazardous waste disposal event (a full station wagon of stuff cost me about $200 to drop off). I also collected a lot of collectible and miscellaneous stuff and hired one of those services that will sell things on Ebay for you. Yes, they took 45% (including shipping) but they did a great job. I was amazed at how much people paid for things like my old high school ring and my Barbies...why I was hanging onto them after 50 years makes no sense. My kids sure didn't want them. And I'm still not done. I'm going back and forth on the sterling silver. I don't use it, and my kids aren't interested. They are collecting their own stuff. Too bad they aren't learning from my mistakes. I know I should just bite the bullet and sell the silver and a few other heirloom items, but I'm not ready yet.

Look for freecycle also. You post things online and interested people respond, your junk = others treasures. Many towns have it. I posted old furniture, paint, my wedding gown. The paint was taken by a local elementary school pta. My gown was taken by a woman who couldn't afford one, my married daughter is 7 inches shorter

The last few posts has to do with buying first or selling first how???? I need more info about what to do not how to get rid of my stuff. Sorry but this is a tough decision.

Thanks for the input, Penny. I'll try freecycle to get rid of a sofa that needs to go (Salvation Army does not want it!). Here's hoping!

Fortunately for us, we knew where we wanted to go. We purchased a lot in 2005 in the Albemarle Plantation in North Carolina, We went through our house in Massachusetts and sold most of the "surplus" stuff on Craig's list - fair warning - price it cheap and it will sell and staged the house to sell as a FSBO. We collected over $600 for essentially junk that we were going to throw out. We came down to the plantation and received bids from three different builders with sticker shock. So we decided to buy a resale for cash and put the lot on the market. The sales contract was contingent on selling the Mass. house, but we already had a buyer. We begged, borrowed and purchased packing materials and when the time came, packed up, closed on the Mass. house and moved down. I would not want to own two properties - too much risk.

Thanks Angela - somehow we got off the track of buy first or sell first and moved on to downsizing. For a much more detailed discussion of that topic, see our series of 2 articles, both of which have tons of great suggestions and comments:
http://www.topretirements.com/blog/retirement-planning-2/12-steps-to-downsizing-success.html/
http://www.topretirements.com/blog/financial/how-to-downsize-in-retirement-checklist-and-tips.html/