Dangers of Carrying a Property

Why Buying Before Selling Can Be Risky in Today’s London, Ontario Real Estate Market

In a fast, rising market, buying first and selling later can feel like a confident move.

In a shifting or balanced market, it can become a very expensive gamble.

Over the past year in London, Ontario, and surrounding communities, we’ve seen inventory levels increase, days on market lengthen, and buyers negotiate more aggressively. Homes are still selling, but not always quickly or at the price sellers expect.

That’s where the danger lies.

When you purchase a new home, especially after removing conditions without a firm sale on your current property, you are taking on significant financial and legal risk. Many homeowners underestimate what “carrying two properties” entails.

Let’s break it down clearly.

What Does “Carrying a Property” Mean?

Carrying a property means you own two homes at the same time and are financially responsible for both of them.

That includes:

• Two mortgage payments
• Two property tax bills
• Two insurance policies
• Utilities for two homes
• Maintenance, lawn care, snow removal
• Potential vacancy or staging costs

If your current home does not sell quickly, you may be funding both properties for weeks or months.

In today’s London real estate market, that timeline is far less predictable than it was during the 2020–2022 surge.

The Risk of Buying Without Selling First

1. You Don’t Know Your Final Sale Price

One of the biggest unknowns is what your existing home will sell for.

Many homeowners estimate their future sale price based on:

• A neighbour’s sale six months ago
• Peak market comparables
• An online automated valuation

But markets move. Buyer sentiment changes. Interest rates shift affordability.

If your home ultimately sells for less than anticipated, that gap comes directly out of your equity.

A $50,000 pricing difference can materially impact:

• Your down payment
• Your debt ratios
• Your long-term financial flexibility

2. You May Be Forced to Accept a Lower Offer

If the closing date for your purchase is approaching and your home hasn’t sold, your leverage disappears.

Buyers can sense urgency.
You may feel pressure.

That’s when price reductions accelerate, and negotiations become defensive rather than strategic.

Instead of negotiating from a position of strength, you may be negotiating to avoid financial strain.

3. Bridge Financing Is Not a Safety Net

Many buyers assume they can rely on bridge financing.

Bridge loans are typically available only when you have:

• A firm sale agreement is in place
• A defined closing date

If your home hasn’t sold, traditional bridge financing may not apply.

You could be forced into:

• A line of credit
• Private lending
• High-interest short-term borrowing

Those solutions are expensive and not always guaranteed.

4. The Purchase Agreement Is Binding

This is critical.

Once you remove conditions on a property financing, inspection, or the sale of your home, you have a firm, legally binding agreement.

The seller of the home you purchased:

• Does not have to extend the closing
• Does not have to allow you to cancel
• Does not have to wait for your property to sell

If you fail to close:

• Your deposit is at risk
• You can be sued for damages
• You may be responsible if the seller resells for less

This is not theoretical. It happens.

5. Carrying Two Homes Can Create Financial Stress Quickly

Even a short overlap can feel manageable.

But what if:

• Your home takes 60–90 days to sell?
• The market softens further?
• Are showings slow?
• An inspection issue delays a deal?

Two mortgage payments at today’s interest rates can quickly strain monthly cash flow.

And stress impacts decision-making.

Current Market Conditions in London, Ontario

The London and southwestern Ontario real estate market has shifted toward a more balanced environment:

• Buyers are cautious
• Financing approvals are tighter
• Homes are sitting longer
• Pricing must be precise

This is not a “list Friday, sell Monday” market.

Strategic pricing, presentation, and patience are more important than ever.

That unpredictability makes buying before selling significantly riskier than it was under peak conditions.

Why Selling First Is Often the Prudent Strategy

In today’s environment, selling first offers clarity.

When you sell your primary home before purchasing:

• You know your exact sale price
• You know your firm closing date
• You know your available equity
• You eliminate carrying risk

You become a strong, confident buyer.

In fact, sellers prefer buyers with:

• No sale condition
• Firm financing
• Clean offers

You gain negotiating power rather than losing it.

But What About Finding the Right Home?

This is the most common concern.

“What if I sell and can’t find something?”

There are strategies to manage this:

• Negotiating longer closing dates
• Arranging temporary accommodations
• Including flexible possession clauses
• Watching the market closely before listing

Planning matters.

But risk should be calculated, not based on emotion.

When Buying First May Make Sense

There are situations where purchasing before selling can be appropriate:

• You have substantial liquid reserves
• Your current home is highly desirable and well-positioned
• You can comfortably carry two properties for several months
• You have secured a conditional offer on your existing home

Even then, it should be done with full awareness of the financial exposure.

Final Thoughts: Protecting Your Equity

For most homeowners in London, Ontario, today, selling first is the more conservative and financially responsible strategy.

Real estate is often your largest asset.

Protecting that equity matters more than moving on a timeline that feels convenient in the moment.

Every situation is different, but in a market with longer days on market, cautious buyers, and tighter financing, reducing risk should be the priority.

If you’re considering a move and weighing whether to buy or sell first, make the numbers clear. Consider worst-case scenarios. Understand your exposure before removing conditions.

That conversation can save you significant stress and potentially significant money.

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