It’s one of the most common questions we are asked at Ian Reid Vendor Advocates when people are in the early stages of planning a move…Should they buy their next property first, then sell their existing home, or vice versa? The fact is that there is no straight forward answer that will suit every person, as the answer will depend very much on your own personal circumstances and preferences. But, having said that, here’s an outline of the relative pros and cons of each option so you can make your own informed decision.
Selling your home first and buying later
As a general guide, we tend to find that in a ‘normal’ property market most people prefer to sell their existing home first, then purchase their next home afterwards. This approach gives you some certainty as to how much your current property is worth, and therefore what your budget will be for the next property. It also gives you certainty on the timing of the settlement for your current home so that you can aim to move just once.
The downside to this approach is that if you have difficulty finding and securing your next home, you may end up having to find temporary accommodation in between settlements, which will mean making two moves rather than one.
Buying your new home first and selling later
This approach was certainly more popular in recent years, due mainly to the strength of buyer demand. With more buyers than sellers, many people knew they would be able to sell their current property with relative ease…but securing their next home was more of a challenge!
However, buying before you sell in the current market conditions can be more financially complex, particularly if you do not have access to the full purchase price of your new home without relying on the proceeds of the sale of your existing home.
Buying first may mean that you find yourself under extra pressure to sell your existing property by a set date, meaning you may be under pressure to accept a lesser offer than you would like. In this situation you may also need bridging finance, which can be a more expensive form of loan than your standard home loan.
Avoiding stress when buying or selling
One option if you are considering buying first is to make your purchase conditional on the sale of your existing home. However, in many cases the sellers of your new home may not wish to accept a conditional offer, so it will put you at a disadvantage in any negotiations.
Clearly, if your peace of mind is an important element to your decision, you may prefer to sell your existing home first. But as we all know, it’s hard to predict when we might stumble across the ‘dream home’ that we simply “have to buy”.
Don’t forget that if you are at all unsure about the right way to proceed when planning a move, our experienced team at Ian Reid Vendor Advocates are always happy to provide you with sound advice and assistance, and our service won’t cost a cent more than having to deal direct with an agent. You can call us any time on 9430 0000.