Value-First Home Team · British Columbia
Should You Sell First or Buy First?
A practical guide from Derek Vanderkooy PREC* & David Maître PREC* | Value-First Home Team
This guide is general information only and does not create an agency relationship or representation agreement. Agency is only established through a signed written agreement. Buyers and sellers are urged to seek independent legal advice specific to their situation.
The Core Tradeoff
Risk Comparison: Sell First vs Buy First
There's no universally right answer — only the right answer for your situation. The decision comes down to how much financial risk you can absorb and how much flexibility you have in your housing transition.
Sell First
- Lower financial risk overall
- No bridge financing needed
- Certainty of funds before you commit to buying
- Less negotiating pressure on your purchase
- May require temporary housing between transactions
Buy First
- Higher financial risk
- Requires bridge financing or substantial savings
- Seamless transition — no gap between homes
- More time pressure to sell your current home
- Potential for carrying two mortgages simultaneously
Neither path is wrong. The question is which risks you can manage — and which ones would keep you up at night.
Option 1
The Subject-to-Sale Approach
A subject-to-sale clause lets you make an offer on a new home while protecting yourself from owning two properties at once. It's a middle-ground approach — you move forward on a purchase but stay protected if your current home doesn't sell in time.
What It Is
Your purchase offer is conditional on successfully selling your current home within an agreed timeframe.
Protection It Provides
Shields you from the scenario of owning two properties and carrying two mortgages simultaneously.
Set Timeframe
Gives you a defined window — typically 30 to 90 days — to sell your current home before you must commit or walk away.
Market Impact
Less attractive to sellers in competitive markets. A subject-free offer will almost always win over a subject-to-sale at the same price.
Price Consideration
May require a higher offer price to compensate the seller for the added risk and uncertainty of accepting your condition.
Best For
Buyers who need certainty before committing — particularly those with limited savings or limited access to bridge financing.
One thing to know: If the seller receives another offer while yours is subject-to-sale, they can issue a 72-hour clause requiring you to either remove your subjects or walk away. Have a plan ready.
Option 2
Bridge Financing
Bridge financing is a short-term loan designed to cover the financial gap when you're buying a new home before your current one has sold. It lets you complete your purchase using the equity in your existing home as collateral — and repay the loan once your sale closes.
Selling Current Home
Prepare listing and accept offer
→
Bridge Financing
Short-term loan covers the gap
→
Buying New Home
Complete purchase before sale finalizes
Short-Term Duration
Typically 6–12 months. Designed to cover the gap, not replace your long-term mortgage.
Higher Interest Rates
Rates are higher than traditional mortgages, reflecting the short-term and transitional nature of the loan.
Collateral
Uses the equity in your current home as security for the lender. You generally need a firm sale in place to qualify.
Competitive Offers
Allows you to make subject-free offers on new homes — a significant advantage in competitive markets.
Monthly costs add up fast. Bridge financing means carrying two properties plus the additional loan interest. If your home doesn't sell quickly, financial strain increases with every week that passes.
Know the Risk
Deposit Exposure
When you buy a home before selling, you're putting real money at risk. Understanding what's on the line — and why — is essential before you commit.
1
Initial Deposit Required
A substantial deposit — typically 5–10% of the purchase price — is required upfront. On a $900,000 home, that's $45,000 to $90,000 committed immediately.
2
Forfeiture Risk Is Real
Failure to complete the purchase can result in forfeiture of your entire deposit. Worse, you may also be sued for damages far exceeding the deposit — including the seller's losses if they must resell at a lower price.
3
Common Failure Points
Non-completions most often happen because the buyer's current home didn't sell, financing fell through, or bridge financing couldn't be secured in time.
4
It's a Legally Binding Contract
A signed purchase agreement is a legal obligation. Changing your mind or running into problems does not automatically release you from it.
Mitigation Strategies
Financing Contingencies
Include financing subjects where possible to protect yourself if your mortgage approval changes.
Realistic Timelines
Set completion dates that give your current home enough time to sell — don't compress the window to win a deal.
Pre-Approved Bridge Financing
Secure bridge financing approval before you submit an offer, not after — so you know it's available if you need it.
Know Your Numbers
Understand exactly what you can afford to carry if both properties overlap, and for how long.
Making Your Decision
Which Path Is Right for You?
There's no formula that works for everyone. Your decision should be based on your equity position, financial cushion, market conditions, and how much uncertainty you can comfortably manage.
Consider Selling First If…
- You need certainty and lower financial risk
- You have flexible housing options (family, rentals, short-term)
- The market is slow or uncertain
- You have limited equity or savings
Consider Buying First If…
- You have substantial equity and savings
- You can qualify for bridge financing
- The market is competitive and strong offers matter
- You want a seamless, gap-free transition
- You can comfortably handle short-term financial pressure
The right answer isn't "sell first" or "buy first" — it's the path that matches your actual financial position and risk tolerance. That's a conversation worth having before you start looking at homes.
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