Should I buy first and then sell, or sell first and then buy?
11 factors to consider when making a move.
When you are considering a move, one of the major decisions you will face is whether to buy or sell first. Many factors can influence your decision, including the reason you are moving, the type of property you want to buy, the state of the property market, as well as your current financial situation.
Here, we weigh up the pros and cons of buying or selling first, to help you choose the option that is best suited to you.
If you’re considering a move, it’s usually because your current property no longer meets the needs of your family or your lifestyle. You might be moving so you can be within a specific school catchment zone, or perhaps you need more space for growing children. If you have specific requirements for your next home that are non-negotiable, you may be faced with having to purchase before you sell.
Pros of Buying First
- With the security of being in your current home, you have plenty of time to find the perfect property that ticks all the boxes for your family.
- When it comes time to sell your home, you will have the comfort of knowing you can move into your new property before selling, and not having to live through the sales process.
Cons of Buying First
- Securing finance for a second mortgage can be challenging, especially with the tightened lending requirements from the banks.
- You may need to arrange bridging finance to cover the cost of the new purchase until the existing property is sold. This may limit the amount of time you have to sell.
- You may have purchased a property with the expectation that you would be able to sell your old home for a certain amount. If this sale price is not achieved, you may find you have stretched yourself with the new purchase.
- With two mortgages or bridging finance in existence, you might feel pressured to sell quicker or at a lower price to alleviate some financial stress.
It may be daunting to sell your home without the security of another property, but this approach has many advantages and can give you the upper hand during the negotiation process. Selling your property first gives you the gift of time – time to prepare your home for sale, time to generate competition among buyers and time to negotiate the terms of the contract. Without the pressure to sell within a set timeframe, you are better positioned to achieve your desired sale price.
Pros of Selling First
- You have the freedom to negotiate offers and sell when you are happy with the price and conditions of the contract, without being restricted by time constraints.
- With time on your side, you have the advantage of preparing your home correctly for sale. The difference between a good sale price and a great sale price is in the care, attention and detail you put into presenting your home to its absolute best.
- Selling before you buy your next home, provides certainty of a budget, as you know exactly how much you can spend on the purchase.
Cons of Selling First
- Although the proceeds from your sale will fund the next purchase, you may need to act fast and buy a property before the settlement of your old home. This can leave you feeling rushed to make a decision.
- If the market is on the incline, local property prices could rise between selling and buying your new home. A booming market also means properties are selling quickly so there is likely to be strong competition for your dream home.
Making the right choice for your family
When deciding which step to take first, the advice from an experienced agent can be invaluable.
If you feel purchasing your next home first is the best choice, an experienced agent can provide valuable insights to help you secure your dream home. They can offer advice on where to buy, give you an understanding of values and let you know of any upcoming homes that may suit you. In tightly held areas such as Toowong, this information can be extremely helpful.
On the other hand, if selling your property first is the best choice for your family, an agent with extensive local knowledge and experience is key. They can help with strategic pre-sale preparations and will have access to buyers searching for homes like yours.
If you would like to discuss your options, contact us today to help you choose the approach that is best suited to you.