Real Estate

Buy first or sell first in current market (GTA)

  • Last Updated:
  • Jun 7th, 2020 12:17 pm

Poll: Would you buy first or sell first in the current market?

  • Total votes: 55. You have voted on this poll.
Buy First
 
12
22%
Sell First
 
33
60%
List first, but pull the trigger on Buy if find dream home
 
10
18%
[OP]
Jr. Member
Jun 6, 2007
136 posts
4 upvotes

Buy first or sell first in current market (GTA)

I live in the burbs in the GTA and am considering course of action. What is the wisdom of the crowd?
24 replies
Deal Addict
Dec 6, 2006
4715 posts
1236 upvotes
Toronto
This is RFD, we buy first and think later.
Deal Guru
Feb 29, 2008
11493 posts
6588 upvotes
Even in the good ole days I suggested to sell first then buy. You never know what your home may sell for, so many things can happen and if coronavirus isn't a good example of that, I don't know what is
Deal Fanatic
Feb 22, 2011
6931 posts
7067 upvotes
Toronto
I am definitely bullish on RE but I would never buy before selling. It just limits your options.
Deal Fanatic
User avatar
Feb 2, 2014
8001 posts
2238 upvotes
Toronto
mazerbeaner wrote: I am definitely bullish on RE but I would never buy before selling. It just limits your options.
Depends on your situation and the market.

There are times where you can get a firm offer in less than a day when you sell. But when you buy, you will be competing against 10+ other offers. In this case, I say buy first.

In a balanced market, I agree with you though.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Guru
Feb 29, 2008
11493 posts
6588 upvotes
CdnRealEstateGuy wrote: Depends on your situation and the market.

There are times where you can get a firm offer in less than a day when you sell. But when you buy, you will be competing against 10+ other offers. In this case, I say buy first.

In a balanced market, I agree with you though.
The problem is you have no idea what rule changes are around the corner. It's just too much of a chance IMO. It works for a lot of people, but I would sleep better selling first... Of course selling first can create a bunch of headaches. I had to move into one of my rentals for a few months because I couldn't find anything in time.
Deal Fanatic
User avatar
Feb 2, 2014
8001 posts
2238 upvotes
Toronto
JayLove06 wrote: The problem is you have no idea what rule changes are around the corner. It's just too much of a chance IMO. It works for a lot of people, but I would sleep better selling first... Of course selling first can create a bunch of headaches. I had to move into one of my rentals for a few months because I couldn't find anything in time.
That's why your real estate agent has to inform you of any changes.

This is a great example now.

February was hot and had low supply (seller's market). I would advise buying first and selling later (again, depending on the market and personal circumstance).

Then COVID hits in March. I would advise to sell first and buy after.

In this market (fairly balanced), I would sell first for the most part.

But there are definitely times when buying first makes sense. And yes, the market can change on a dime, but it's the realtor's job to recognize this and change the plan.

Also, keep in mind, there are some people with nowhere to live if they sell first and couldn't find a place to purchase. They have no family here and short-term rentals are tough (especially if you have pets...).

Nonetheless, to say you should ALWAYS sell first, is a bad statement to make.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Sr. Member
Aug 27, 2004
654 posts
86 upvotes
Cyberspace
In 2017 Calgary, we bought first and then sold.
The market was decent and we were around the average days on market when we sold.
Even then, I would say it's not for the risk averse.
We found it stressful trying to line up possession dates and bridge financing the gap.
Every other house we bought, we had already sold and banked the proceeds.
Former Know-It-All
Deal Guru
Feb 29, 2008
11493 posts
6588 upvotes
CdnRealEstateGuy wrote: That's why your real estate agent has to inform you of any changes.

This is a great example now.

February was hot and had low supply (seller's market). I would advise buying first and selling later (again, depending on the market and personal circumstance).

Then COVID hits in March. I would advise to sell first and buy after.

In this market (fairly balanced), I would sell first for the most part.

But there are definitely times when buying first makes sense. And yes, the market can change on a dime, but it's the realtor's job to recognize this and change the plan.

Also, keep in mind, there are some people with nowhere to live if they sell first and couldn't find a place to purchase. They have no family here and short-term rentals are tough (especially if you have pets...).

Nonetheless, to say you should ALWAYS sell first, is a bad statement to make.
Agree with all of it. Thing is the realtor can't anticipate a rule change coming down the pipe 2 months in advance.
Sr. Member
May 23, 2006
610 posts
33 upvotes
Vancouver
Also, do you have enough financing or cash to buy first then sell?

If you own a mortgage-free property that worth, say, $500k. The bank cannot lend you $400k even on a temporary basis unless you already have a buyer offer on your existing property.

They look at the income test. They assume, you can rent the property out for, say, $2k per month. And based on that assumption, you can only get ~$120k loan from the bank even your property is worth $500k
Sr. Member
Feb 19, 2019
700 posts
695 upvotes
Stouffville ON
In the current GTA real estate market due to uncertainties I would suggest selling first despite the crazy sellers market we are experiencing as of today.
Full Time and Full Service Realtor
Deal Addict
Mar 27, 2004
4118 posts
1613 upvotes
Toronto
Check with your agent and show you recent sales activity, how quick properties are moving.. and do the same for the area you are interested in.
Full-time Realtor
[OP]
Jr. Member
Jun 6, 2007
136 posts
4 upvotes
boyohboy wrote: This is RFD, we buy first and think later.
Ha. Yes. But we also nerd out on return policies.
[OP]
Jr. Member
Jun 6, 2007
136 posts
4 upvotes
senasena wrote: In the current GTA real estate market due to uncertainties I would suggest selling first despite the crazy sellers market we are experiencing as of today.
Surprised you think it’s a seller’s market. Is it because the new mortgage rules kick in on July 1st?

General sentiment seems very cautionary.
Deal Guru
Feb 29, 2008
11493 posts
6588 upvotes
ColdRFD wrote: Surprised you think it’s a seller’s market. Is it because the new mortgage rules kick in on July 1st?

General sentiment seems very cautionary.
10% of the mortgages in Toronto are insured. Buyers are coming with 20% down for the most part. Not many putting down 5% as you can see. The rule changes will purchases outside of Toronto and Vancouver.

Think about it, there's also B20. Not many are buying a $600K condo with 5% down. When you think about it, we must have some of the most stringent mortgage rules on the planet. Yet Bears are still calling for a 50-60% crash. :facepalm:

Market seems more balanced right now. Condo market is most affected.....other housing types are doing well.

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