Should Toronto Condo Owners Buy or Sell First?

Embarking on the journey of either buying a new condo or selling your current one in Toronto, Ontario, presents a classic real estate conundrum. The decision whether to purchase your next condo before selling your existing one, or vice versa, is a significant one with financial and logistical implications. This breakdown aims to shed light on the key factors to consider, tailored for the Toronto condo market.

Buying First: The Upsides and Downsides

The Toronto condo market is as dynamic as it gets. Snagging your dream condo before selling might seem appealing, but it's important to weigh the pros and cons.

Pros:

• Immediate Transition: Buying first removes the worry about where you'll live between sales. Say goodbye to temporary housing as you can move directly into your new Toronto condo.
• Leisurely Move: Having the keys to your new place means you can move on your own schedule, avoiding the rush and reducing stress.

Cons:

• Financial Pressure: Holding two mortgages at once can be a financial juggling act. A sudden need for a bridge loan or dipping into your savings might be necessary to bridge the gap.
• The Need for Speed: The financial strain may push you to sell your current condo faster than preferred, possibly at a lower price point.

Selling First: The Pros and Cons

Opting to sell your Toronto condo before buying another can offer more financial security but comes with its challenges.

Pros:

• Singular Mortgage Relief: By selling first, you sidestep the stress of dual mortgages, giving you a clearer picture of your budget for the next purchase.
• Enhanced Buying Power: With the proceeds from your sale, you're in a stronger position to make assertive offers in Toronto’s often competitive condo market.

Cons:

• Interim Housing Pains: Selling first can mean searching for temporary housing solutions if your next purchase isn't timed perfectly.
• The Rush to Buy: Having sold your condo, you might feel the pressure to quickly find and buy your next place, which might not be ideal.

So, What's Best for You?

The Toronto real estate market is unique, and deciding whether to buy or sell first involves considering several factors:

1. Current Market Conditions: Toronto's condo market fluctuates. In a seller's market, your condo may sell rapidly, making selling first appealing. Conversely, in a buyer's market, finding your next dream condo before selling could be wise.

2. Your Financial Situation: Assess whether you have the means to handle two mortgages if needed. Selling first could be financially safer if funds are tight.

3. Risk Tolerance: How comfortable are you with uncertainty? If the idea of juggling two properties causes anxiety, selling first might be your best route. Alternatively, if you have the financial leeway, buying first allows you more time to search for that perfect condo.

Bridge Loans and Contingency Offers

If neither buying nor selling first seems to fit perfectly, Toronto condo owners have some alternatives:

• Bridge Loans: A temporary solution that helps cover the gap between purchasing your new condo and selling your old one, giving you financial breathing room.
• Contingency Offers: Making your offer on a new condo conditional upon selling your current one can offer peace of mind but be aware, not all sellers will be open to such terms, especially in a hot market.

In the end, whether to buy or sell your Toronto condo first is a decision that hinges on personal circumstances, financial capacity, and market dynamics. Carefully considering these aspects can help you make a choice that aligns with your needs, hopefully easing the path to your next condo in Toronto.