One of the most popular questions people ask when they are in the early stages of planning to move house is whether it’s better to buy first or sell first. Not surprisingly, there is no simple ‘one size fits all’ answer to this question, as the answer will depend on your own plans and personal circumstances. However, it’s worth looking at the relative pros and cons of each option to help you decide which option may suit you best.
Buying your new home first, then selling
In recent years this approach was certainly a popular option in many areas, due mainly to the strength of buyer demand. In a market where there were more buyers than sellers, most 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, now that the property market has become more balanced, the idea of buying before you sell has become more financially complex in many areas of Victoria. It’s a strategy that requires careful though if, like most people, 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.
Selling your home first and buying later
In a ‘normal’ property market, such as we are currently dealing with in 2019, most people prefer to sell their existing home first, then purchase their next home afterwards. This approach provides you with a degree of certainty as to how much your existing property is worth, and therefore what your budget will be for the next property. It also allows you to be more certain about the timing of the settlement for your current home so that you can avoid having to make two moves.
The potential drawback to this approach occurs if you have difficulty finding and securing your next home. A delay like this could mean you have to find temporary accommodation in between settlements, which will mean packing and unpacking twice.
Minimising stress when buying or selling
If you are considering buying first, you could try to make your purchase conditional on the sale of your existing home. However, the reality is that most home sellers will be reluctant to accept this kind of conditional offer, putting you at a substantial disadvantage in any negotiations.
If your peace of mind is a key element in your decision, you may prefer to sell your existing home first. But, let’s face it, you never know when you might stumble across the ‘dream home’ that you simply “have to have”, so your plans can change in the space of one Open House!
Of course, if you are at all unsure about the right way to proceed, whether you want to buy first or sell first, you can always give the friendly Customer Service team at Ian Reid Vendor Advocates a call on 9430 0000. Our Advocates are always happy to provide you with sound advice and assistance.