Whether you’re looking to upgrade or downsize, you’ll need to decide whether to buy or sell first. While this sounds like a simple choice, often it can be a little tricky to get the timing right. Many people don’t want to sell before they’ve found a new home. So, let’s look at when this is ideal.
Selling first means putting your home on the market before you’ve bought a new home. Having a good strategy in place helps you to achieve the results you desire. This possibility works best if you:
- Prepare your home well for sale – By spending time on your property and making it look its best, you’ll often get the price you want.
- Organise your time wisely – Make a list of everything you need to do. Then, set yourself deadlines to achieve goals and stick to these.
- Research the market – Don’t just rely on a real estate agent to give you a price guide for your home. Instead, look at the market yourself. Go to open inspections and compare other homes to yours.
Pros of Selling First
- A deposit is available for your next home.
- Finances won’t strain.
- You can wait to get the price you want.
- You’ll pay less in interest.
Cons of Selling First
- Buying that dream home may be missed.
- Renting might be on the cards.
- Moving twice might be unavoidable.
- Finding a home you like may be months away.
Selling first means that you’ll need to watch the market carefully. Subsequently, determine whether it’s a buyer’s or seller’s market. If it’s a buyer’s market, then sell your home before buying. Why? Well, property demand is higher and you’ll fetch a higher price. Other reasons why you’d chose to sell first are when you:
- Have little or no equity in your home.
- Think it will take time to sell your property.
- Don’t want added financial stress.
- Receive a low income.
Simultaneous settlement occurs when the sale of your old home and the purchase of your new home occur at the same time. While this is difficult to achieve, it is possible.
- Fast and efficient.
- Allows you to time your move.
- Less cost.
- Reduces stress.
- You know how much you can spend on a new home.
- Settlement can get delayed.
- The settlements rely on each other.
- Should minor problems occur, then move rescheduling may occur.
- There’s a risk of losing your deposit.
If you’re looking to settle simultaneously, then ask for a long settlement on the home you own. By asking for a 6-month settlement, you will give yourself time to organise the purchase of your new home. You can even ask for the addition of a clause in the contract stating settlement is adjustable with 4-weeks’ notice. Thus, this addition then gives you time to search for a new property and to arrange for settlement on the same day.
To make a simultaneous settlement possible you’ll need be willing to compromise. Therefore, if you’re seeking delayed settlement, you may have to accept a lower home price. Plus, you may also find that you’ll have to pay a little more for the home you’re buying.
Pros of Settling Simultaneously
- You’ll only need to move once.
- Reduces costs.
- Less financial risk.
- Minimal disruption to daily life.
Cons of Settling Simultaneously
- Hard to organise.
- Organisation needs to be perfect.
- Negotiation skills need to be impeccable.
- It’s essential to have a good team backing you – mortgage broker, conveyancer and real estate agent.
Tags: Home Buying