Buy or Sell First in Metro Detroit? A Guide Through Your Real Estate Journey

Making a move in the Metro Detroit real estate market brings up the age-old question for homeowners: Should you purchase your new house before selling your current one, or vice versa? Each path has its advantages and potential drawbacks, influenced deeply by factors like market trends in Southeast Michigan and your personal situation. Here's what you need to consider to make an informed decision that suits your plans.

Buying First: Weighing the Pros and Cons

The thought of securing your dream home in cities like Detroit, Ann Arbor, or Royal Oak before selling your current property is indeed tempting. Here's a breakdown of why this might be appealing and where caution is warranted.

Pros:

• You're Immediately Settled: By buying first, you eliminate the worry of seeking temporary lodging. The transition to your new home in bustling neighborhoods or quieter suburbs of Southeast Michigan can be seamless, dodging the inconveniences of storage solutions or temporary housing.
• A Relaxed Move: Owning your next home upfront grants the luxury of moving at a pace that suits you, reducing the burden and chaos typically associated with these transitions.

Cons:

• Financial Burdens: Juggling two mortgages, unless the new one is bought outright, can quickly escalate your expenses. This situation might lead to tapping into savings or applying for a bridge loan to stay afloat.
• Pressure to Sell: Supporting two homes financially in cities like Birmingham or Ferndale could force your hand to sell sooner than desired, potentially resulting in accepting an offer below your target.

Selling First: The Flip Side

Selling your home before purchasing the next offers financial clarity but is not without its predicaments.

Pros:

• Avoiding Dual Mortgages: Selling your home first frees you from the worry and financial strain of two mortgages. It clarifies your budget for the next purchase in Metro Detroit's varied market, streamlining the process.
• Enhanced Buying Power: With proceeds from your sale in hand, your offer for the next home becomes more compelling, a significant advantage in competitive segments of the market.

Cons:

• Temporary Housing Challenges: Selling first might leave you in a position where you need to find intermediate housing solutions, which can range from inconvenient to downright frustrating.
• Potential Rush to Buy: Having sold your home, the clock starts ticking to find a new one, ramping up the pressure, which might lead to compromises or hurried decisions.

Making the Choice: What's Best for You?

The optimal decision varies based on a few critical factors:

1. Current Market Conditions in Metro Detroit: Are homes flying off the market, or is inventory languishing? In a seller’s market, typical for many Metro Detroit areas, selling first might provide leverage due to quick sales. Conversely, in a buyer’s market, having the security of your next home before selling could offer peace of mind.
2. Your Financial Landscape: Can you comfortably straddle two mortgages for an indeterminate period? Does selling first present a less risky financial move? Assess your resources and risk tolerance carefully before deciding.
3. Risk Comfort Zone: How do you fare with uncertainties like financial overlaps or haste in purchasing? If such risks unsettle you, selling first might align better with your psyche.

Considering Bridge Loans and Contingency Offers:

If neither scenario seems appealing, alternative strategies like bridge loans can ease the financial transition, or making a contingent offer can protect against owning two homes simultaneously. However, bear in mind that not all sellers in the competitive Metro Detroit market favor contingency deals.

Your choice between buying or selling first in areas like Novi, Sterling Heights, or Livonia pivots on personal circumstances and market dynamics. By evaluating the advantages and challenges of each approach, contemplating your financial readiness, and assessing your appetite for risk, you can steer toward a decision that aligns with your objectives for a smoother transition to your new home.