Should You Buy a New Home Before or After You Sell Your Current One?
As your family grows and your career changes, there’s a good chance you will eventually outgrow your first home. When this happens, you might decide you want to sell your existing property and purchase a new one.
But, should you sell your house first and hope you’ll find a new one you can purchase and move into within the settlement period, or do you buy a new one first and hope your current one sells for a decent price?
Playing the role of both a seller and a buyer can be a stressful process, but to take some of the stress out of this decision process, we look at the advantages and disadvantages of selling your current property before you purchase a new one.
The Advantages of Selling First
You Can Focus on Adding Value to Your Current Home
To make your house presentable to buyers and to get the best price when your house goes up for sale, there’s a good chance you might need to do some repairs/renovations first. This means you will need to allocate a budget and time to complete the work.
By handling the selling costs first, your budget won’t be put under the strain of trying to get your current property up-to-scratch while also trying to make the necessary payments for a new property, such as third-party services and loans.
You’ll Have the Funds You Need When You’re Ready to Buy
Selling your current home before you purchase a new one will give your bank account a much-needed boost. This will make purchasing your next property a lot easier, as vendors often prefer entertaining buyers who already have funding. This will also help the negotiation/budgeting process, as you will know exactly what you can and can’t spend.
You’ll be Able to Discuss Settlement Dates
One of the biggest concerns most sellers/buyers face when they sell their current home before purchasing a new one is the fear that they will need to move out of their home before they’ve secured a new one.
However, working with your conveyancer, there is a possibility you’ll be able to negotiate a clause in the contract that allows for a longer settlement or a rent-back period while you search for your new home.
The Disadvantages of Selling First
There is a Risk You Might not Find a New Home Straight Away
If you sell your current home first, you do run the risk that there might not be any listings available at that particular point in time that suit your needs. Purchasing a new home is a big decision, so the last thing you want is to just snatch up anything out of desperation.
This means that there is a chance that you might need to move into a short-term rental property while you hunt for your dream home. Unfortunately, this will mean you will have to move house twice and your budget will likely take an extra hit.
You Could End Up Competing With Rising House Prices
Housing prices can be very unpredictable, which means that if you’ve already sold your home and are living in a rental property; you do run the risk of your house search correlating with a pricing boom. If this were to happen, you could end up paying more than you originally expected for your dream home.
If you do decide to sell your home before purchasing your next one, make sure you do some research to see how the market is moving. It’s also worth taking the time to get any relevant documentation and loan pre-approvals in place early on, so when you do find your dream property you’ll be able to make an offer and hopefully move in as soon as possible.
At Vicki Philipoff Settlements, we’re always on hand to help with your conveyancing needs when buying or selling a property. For an obligation-free chat about your situation, contact us on (08) 6311 4888 or send us an online enquiry.