Timing your purchase with your sale can be complicated, and it can be challenging to know whether to sell or buy first. Here’s what to consider. Choosing whether to buy or to sell first is not as simple as it seems. There are a lot of variables, and there are pros and cons to both.As with all things real estate, do your homework. Are you staying in the same area or moving away? Are you upsizing or downsizing? Will you be taking on a smaller or bigger mortgage? There are plenty of questions to ask, but here’s where to start.
Get Clear On Your Finances
According to Finder, the number one consideration on whether to buy before you sell is your finances. If you are flexible and comfortable in your finances, then it makes more sense to find your dream home before putting your house on the market. With this approach, you don’t have the pressure of having to choose from what’s available at the time you have sold your property. However, if your finances are tight, it might add stress during the purchasing process. For example, if you have already purchased a home and then it takes longer than expected to sell your current property. In this case, Canstar says you can access a bridging loan for when and if you need finance to purchase a second property with the intention of selling your current one. Typically, bridging loans are interest only payments and have limited terms so can be a good option if you get stuck.
Consider The Area In Which You Are Selling
Nick Boyd, Belle Property’s Head of Sales and Business Development, says your next consideration needs to be the location in which you’re selling your property.“When deciding if you should buy before you sell you should understand what is happening in the area you are selling in. Get a realistic estimate of how long it might take you to finalise a sale. “Do your research on the area and its recent sales. Consult local real estate agents as they will be able to advise on the average days on the market,” says Nick.
Understand The State Of The Property Market
“The state of a housing market will also affect your ability to negotiate for the sale of your new home,” adds Nick. “In a buyer's market, when house sales have slowed down, you will have a greater ability to negotiate the terms of the contract settlement. In many cases, the buyer can choose whether to settle in 30, 60 or 90 days. You might be able to extend this if you find your dream home but need more time to sell your place.“However, if the housing market is moving fast, it can work in your favour for private sales if you can settle in a shorter period, such as 30 days. This is another factor to keep in mind as it could improve your bargaining power if you've already sold your home and you're ready to sign. “The most important thing is not to extend yourself or put yourself under additional stress. Speak to the experts and ensure you do your research before you make your decision,” advises Nick.
For more information, please visit www.belleproperty.com