Buying a new build is exciting, but if you also have a home to sell, the process can become a bit more complex. From timing your sale to managing financial risks, there’s a lot to consider—especially with the unique timelines involved in new builds. Here’s what you need to know to navigate this process smoothly and protect your investment.
Understand the Timing Challenges
1. Spec Homes (Quick Possession Homes)
If you’re purchasing a spec home, the timeline is typically shorter—anywhere from immediate possession to 3–6 months. This makes coordinating the sale of your current home a bit easier, as possession dates are more predictable.
2. Custom-Built Homes
With custom builds, the timeline is much longer (8–18 months), and the possession date is often approximate until the builder provides a final notice. Most builders only give a 30-day notice of possession, meaning you’ll need to be prepared to act quickly. If you’re relying on the sale of your current home to fund your new purchase, you’ll need to list and sell your home within that 30-day window. This adds urgency to the process, making it crucial to work with a REALTOR® who can help you plan effectively.
Plan for Market Risks
The real estate market can shift significantly over the 8–18 months of a custom build timeline. Here’s how to mitigate potential risks:
Evaluate Market Trends: Work with your REALTOR® to understand current and projected market conditions.
Be Conservative with Value Assumptions: Don’t rely on today’s high market value to remain unchanged—plan for potential fluctuations.
Have a Backup Plan: Be prepared to adjust your strategy if the market changes unexpectedly, whether it’s selling sooner or exploring bridge financing.
Consider Bridge Financing
Bridge financing can be an effective solution for buyers who need equity from their current home to complete the purchase of their new build. This short-term loan allows you to buy the new home while waiting for your current home to sell. Your REALTOR® and mortgage broker can guide you in evaluating whether this option is suitable for your financial situation.
Strategic Timing for Selling Your Current Home
Timing the sale of your current home depends on your individual circumstances and the builder’s timeline:
Selling Early: Listing your home well before your new build is complete gives you more control over the sale process but may require temporary housing.
Selling Closer to Possession: Waiting until the builder provides the 30-day possession notice may minimize disruption, but it’s risky if your home doesn’t sell quickly.
Your REALTOR® can help you decide the best timing strategy based on your needs and market conditions.
Account for GST on New Builds
New builds are subject to GST (5% in Alberta), which many buyers overlook. Depending on the builder, GST may or may not be included in the advertised price. Be sure to confirm this detail and budget accordingly. A knowledgeable REALTOR® can help ensure you’re fully informed of all costs.
Work with a REALTOR® for a Seamless Process
Managing the sale of your current home while buying a new build requires careful coordination. A REALTOR® will:
Analyze market trends to help you price your current home competitively.
Provide guidance on timing your sale to align with your builder’s timeline.
Help you navigate the 30-day possession notice and act quickly to list and sell your home if needed.
Offer strategies like bridge financing and temporary housing options.
Final Thoughts
Selling your home while buying a new build can be a challenging process, but with the right planning and a trusted REALTOR® by your side, it’s manageable. By preparing for market risks, timing your sale strategically, and understanding the 30-day possession notice, you can confidently transition into your new home.
Have questions or need help navigating this process? I’d love to assist! Let’s work together to create a plan that ensures your new build journey is smooth and successful.
