Buying a Condo in Ajax First Before Selling Your House? Key Things to Know

You might be planning to downsize to a condo because your house, which once felt just right, now feels too large for your current needs. Well, moving to a condo could certainly work out well for you. Condos for sale in Ajax require less maintenance, provide access to shared amenities, and help lighten your financial burden.

Usually, when you take on the task of buying and selling a house at the same time like this, you have three options: buy and sell simultaneously, buy later and sell first, or buy first and sell afterwards. Today, we will focus specifically on the third option: purchasing a condo first and then selling your existing house. You may need to take this route if you have already found the perfect condo but still need time to prepare your home for sale.

Buying a Condo Before Selling Current House - What's Good and What's Risky

➔ The Good Side

1. More Time to Find the Perfect Condo

When you are not under pressure to move out of your house immediately (something that often happens if you sell first), you get the luxury of time. You can explore different condo apartments for sale in Ajax, compare features, and wait for the one that truly checks all your boxes.

2. Avoid the Hassle of Moving Twice

One big advantage? When you buy first, you can transition straight from your old house to your new place. That means no short-term rentals, no couch-surfing with family, or paying for storage.

3. Secure a Condo at Today’s Prices

Source - Ajax Housing Market Trends (The Canadian Home)

As you can see from the above table, condo prices in Ajax are on the rise. Hence, by buying now, you can secure your condo at today’s price and avoid the risk of paying more in a few months.

➔ The Risky Side

1. Carrying Two Homes Can Be Financially Overwhelming

If your current home doesn’t sell as quickly as you hoped, you will be on the hook for both mortgage payments, two sets of property taxes, utility bills, insurance, and other expenses.

2. Getting Approved for a New Mortgage Might Be Harder

To purchase the Ajax condo, you might need to apply for a mortgage while still holding your existing one. In this case, your carrying costs for the current home count against you, making it difficult to qualify for the new mortgage.

3. Stress Could Lead You to Accept a Lowball Offer

If juggling two mortgages stretches your finances, you might rush to sell your current home. That rush can push you to accept a lower offer on your old house to stop the financial bleeding.

Step-By-Step Guide to Buying First and Selling Later in Ajax

Here is a strategic guide on how to buy first and sell your house later without putting your finances or sanity at risk:

STEP 1 - Review Your Finances Thoroughly

First, check how much equity you have built in your existing house. You will need this equity to qualify for specific financing options, such as a bridge loan or HELOC. Next, run the numbers and check if you can afford to own two properties, potentially for a few months.

You should also check whether you have enough savings to cover the upfront costs of the new condo in Ajax. The upfront costs can add up to around $40,000, depending on the price of the condo apartment. Finally, have an emergency fund of at least 3 to 6 months’ expenses ready in case your current home takes longer to sell or unexpected costs arise.

STEP 2 - Explore Different Ways to Finance Your New Condo

Now, figure out how you will finance the purchase of your new condo before selling your current home. Here are a few financing options to choose from in this scenario -

● Bridge Loan

A bridge loan is specifically for people in your situation who are purchasing a new property before selling their current one. The bridge loan gives you access to the equity in your existing home before you officially sell the house. You can use the bridge loan funds for your new condo’s down payment or closing costs.

● Home Equity Line of Credit (HELOC)

A HELOC could be a better option for purchasing the condo if you have enough equity in your current house in Ajax. A Home Equity Line of Credit allows you to borrow against the value of your Ajax home. A HELOC is a revolving line of credit; you can borrow, repay, and borrow again whenever you need extra funds.

● Port Your Existing Mortgage

If your current mortgage has a favourable interest rate and you are happy with its terms, consider porting it. Porting means transferring your current mortgage, including the rate, term, and remaining amortisation from your current home to your new condo.

● Use Cash Savings

If you are fortunate enough to have significant savings on hand, you can use those funds to buy the condo. This option is the simplest, especially if you want to avoid debt.

STEP 3 - Begin Your Condo Search

After you have figured out your financing, explore condos for sale in Ajax, Ontario. The more certain you are about what you want in your new condo, the smoother your buying process (and also the selling process) will be. Whether you are looking for less maintenance or access to amenities, ensure your new condo fits your new goals.

STEP 4 - Make a Strategic Offer on the Condo

Once you find a condo that checks all the right boxes, make a strategic offer on the property, keeping in mind the contingencies. You must include a financing condition in your offer if you are not 100% approved for your mortgage. Another must-have is a condition to review the status certificate of your new condo building. But try to avoid including a condition to sell your current home, unless absolutely necessary. This condition can weaken your offer, especially if the Ajax housing market is competitive.

STEP 5 - Close on the Condo and Prepare for a Smooth Home Sale

The next step is preparing for the closing day. Ensure your down payment and closing funds are ready, and your financing is also accessible before closing.

While the condo purchase is wrapping up, you must focus on selling your house quickly and for top value simultaneously. You must decide on an asking price, stage your house, and pick a marketing strategy. Once you move into your new condo and your current home sells, you can pay off any short-term borrowing, such as the bridge loan or HELOC.

An Expert Team Can Make This Big Move a Whole Lot Easier

As you have discovered, buying a condo before selling your current home can be a balancing act. However, you don’t have to stress alone; an expert team can help you manage the whole process with confidence.

A skilled Realtor can help you find a condo that fits your needs, budget, and timeline while also preparing and positioning your current home to sell quickly and competitively. You also need a knowledgeable mortgage advisor who can explain your financing options, help you secure the right mortgage, and ensure you are not overextending your budget. And finally, get the help of a trusted real estate lawyer who will handle contracts, deadlines, and paperwork, protecting your interests from start to finish. With this expert team by your side, you can make a smooth and confident move into the next chapter of your life.