The For Sale sign caught Joan’s attention. But it was the handsome home behind it that warranted a change of plans. Not 100 yards away stood the physical embodiment of her ideal home. It was all there--- the perfect look--- the home of her dreams. This Sunday drive brought home for Joan a dilemma debated by the vast majority of repeat homebuyers: Do I buy first or sell first?

Of course, the ideal scenario would be to buy and sell simultaneously. But this route requires terrific luck, nerves of steel, and superb organizational skills. Most homebuyers will need to decide between buying a home then selling their current home and selling their current home then looking for a new home. If you’re contemplating a move, consider the pros and cons of each strategy.

Buying a home first can have its advantages, especially if the home is that serendipitous find that may happen only once in a lifetime. In addition to getting just the house you want, you’ll know exactly how much equity you’ll need out of your present home, and you’ll have a firm move date. If your present home doesn’t sell by the time you close, you can rent your home and hold out for the best offer.

On the downside, you could land up with two houses if you can’t sell your current home. To swing this transaction, most people require a "bridge" or "swing" loan to provide for the new down payment. However, to qualify, homeowners generally need a sizeable income. Even if you qualify, the stress of owing on three mortgages might force you to sell your home at a bargain basement price. Keep in mind that market conditions change. In the end, you don’t know how much you’ll get for your present home.

The less stressful scenario calls for selling your home first. According to Northwest Reporter, a 1998 survey revealed that most repeat buyers, 85 percent, sold their home before purchasing a new home. It’s easy to understand why: you know just how much you can spend on your new home; you avoid carrying three mortgages; and you won’t require a home-sale contingency, which may make it easier for you to negotiate. If alternative housing is available, you can take your time, look around, and buy the right house.

Still, it’s worth noting a few disadvantages to selling your home first. You may feel great pressure to find something fast and even settle for a home that’s less than ideal. You may require interim housing, which could be very stressful if you have to bunk with friends or family for an extended period. Should you decide to rent, it may be difficult to find suitable housing, especially if you have pets. In either case, furniture would have to be moved twice and possibly stored long term. If you’re house hunting efforts are focused on your old community, selling first may also involve paying tuition to the former school district to enable your child to continue attending school there.

What should Joan and you do when faced with a move? Assess your financial condition. Ask yourself: Is it healthy enough to withstand a "buy first" scenario? Consider your ability to handle stress. Do you have the where-with-all to swing three mortgages and the uncertainty that comes with renters? If you sell first, can you adjust to interim accommodations? Would they be practical for the long term? You may want to add in a condition when you sell your home stipulating a long closing or a rent-back option.