If you’re upgrading your home, deciding whether to sell your current property first or buy before selling can feel like a highwire act.
After all, there are so many unknowns, from how much your current home will fetch to how quickly you’ll find somewhere to move. Then, of course, there’s always the chance that real estate prices could rise or crash in the time between you sign one contract and the next.
So what’s right for your situation? We use our professional expertise to examine the pros and cons of both buying first and selling first.
Selling first: The low-risk option
Most people tend to sell their current property first, primarily because it frees up their cash flow. By selling first you’ll also have a concrete budget to work with during your property search, rather than having to rely on speculative figures.
But while selling first may be the less risky strategy, it’s not completely risk-free. There’s still a chance you could end up priced out of the neighbourhood you’ve had your eye on, especially if finding a property you really like takes longer than you had anticipated.
There are things you can do to reduce these risk, including:
- Negotiating a long settlement period so you have plenty of time to move out once your property sells.
- Finding low-cost interim accommodation that gives you breathing room while you house hunt.
- Working with experienced agents who understand your target neighbourhoods.
Buying first: Riding a rising market
Buying a place before you’ve sold is generally considered the riskier strategy, but there are definitely scenarios in which it makes sense. Perhaps you’ve found a dream property in a neighbourhood you’ve been eyeing for years, and the price is right. Even better – you might be moving out of a suburb where prices are rising steadily, so you can be fairly confident things will go your way come sale time.
If you don’t have much of an appetite for risk but still want to buy first, there are ways to protect yourself:
- As with selling first, negotiating a long settlement period will give you the time you need to sell before mortgage payments on the new property kick in.
- If both mortgages are with the same lender, check to see whether they’re willing to negotiate a discounted rate.
- You could also set the sale of your current property as a condition of buying the new place (but keep in mind that this could turn some sellers off).
Knowing the market is key
Making the right call when it comes to buying or selling first is all about understanding property trends in your target markets. Knowing how things are likely to change in your neighbourhood and in the areas you want to buy means you can decide based on evidence rather than optimism or guesswork.
Working with an established team – one with a proven track record in client service – really makes a difference here. If you’re in need of expert advice on selling up and buying your next property, contact our team today.