It is possible to buy and sell at the same time, but there are many factors to consider. Should I sell my house before buying a new one? Or do I have to find my new home and then list my property for sale?
Factors to consider
Current market conditions
Review the real estate market and who it favours – buyers or sellers. Usually, selling first benefits the sellers of homes in a buyer’s market. Buying a house – before selling your own – is a good idea in a seller’s market. Keep in mind that the market you sell in may also be the market you will buy in.
Your financing options
When you sell your home first, you will have a good idea of what you can spend. It will also be easier to get a new home loan once you’ve sold your old home. Buying a house before selling your own could also lead to having two home loans to cover every month.
Control your moving timeline
If you decide to sell first, you may require temporary housing whilst buying your new home. Plan ahead and give yourself enough time to prepare so that you can minimise the stress of trying to align a home purchase and sale.
Here’s what you need to know if you are asking yourself: Do I sell my house before buying a new one?
How are you paying for this purchase? If you need the equity on your current home to finance your new home, then selling first is beneficial. The downside is that you may require provisional housing while you conclude the sale on your next home. You can make an offer on a new home subject to selling your home first. However, this is not as attractive to the potential seller and they may accept another offer where the buyer does not need to sell first, especially if they are in a rush.
Selling before buying makes the most sense for people who are selling in a buyers’ market because you know your current home may take longer to sell, and you probably don’t want to cover the bond for two homes over an extended period of time.
If you sell first, you may have the luxury of time. You can wait for the perfect offer without the niggling angst of knowing you have already bought a new house and you can also make a cleaner offer on that dream home.
Buying a house before selling your own, may put you under financial pressure. So, to buy your new home first, you must have the financial security to own two homes at once.
It is not ideal to foot the bill for two homes and this added financial stress could lead to a rushed home sale. And depending on market conditions, it could even take months before you sell.
So, why buy a house before selling? The upside of buying first is that you won’t have to move multiple times or spend an extended period in short-term housing. Another bonus is that you don’t have to live in the house and try to keep it show-ready. You can move out and let an expert staging company get your home show-ready.
As a last resort, you can always rent out your home and wait for market conditions to get better.
Get bridging finance to unlock emergency funds: If you find yourself unable to close the deal on your new home, even though you have successfully sold your old home, then bridging finance might just be the short-term finance solution for you. Bridging finance is a type of loan you get on money that is due to be paid to you soon.
Work with a top agent: Expert estate agents work with property transactions almost every day of their existence. They understand the complicated process around real estate transactions and a good agent will guide you through the entire process. Another upside to using a reputable estate agent is that they can give you solid recommendations for other cogs in the process: a competent conveyancer for the transfer, a great electrician for the electrical certificate, or even a marvellous moving company. Click here to find an agent in your area.
Airbnb or rent it out: After considering your moving timeline and finances, and considering the state of the real estate market, you might opt to rather rent out your property. In some parts of the country, you might even consider listing your property on a platform like Airbnb. Your moving timeline will most likely influence your decision. Airbnb offers you a short-term, but possibly less stable income. Renting could be the solution if you think it will take some time for the market to recover and you are needing steady, long-term income.
Basics of the market conditions: As a rule of thumb, don’t risk buying first in a buyer’s market. List your home first. If you find yourself in a seller’s market, stock is lower, and buying a house before selling your own would make sense.
It can be a challenge to perfectly align both the purchase and the sale of a property. There are so many moving parts, and you could sell first or buy first – there is nothing wrong with either approach. But make an informed decision and be real when you look at your finances, your moving timeline and the market conditions – where you are going to sell and where you are going to buy.