If you’re delving into the real estate market and have the option to purchase a new house but need to do something about your current house, you’re likely to be considering the question: should you sell or buy a house first?
In our latest blog series Things to Consider When Buying a Home, Northside Realty will help you answer the tough questions and offer advice if you need it.
Is it better to sell or buy a house first?
If you have no financial constraints or don’t mind paying for a bridging loan, then yes it makes sense to buy first.
- No pressure to sell your home by a certain date.
- You can move and settle into your new home, then focus on selling your old home.
- Selling your existing home with no furniture or staging, may not present your home in the best way.
- Paying for staging can cost a lot of money (if you’ve already moved your furniture into your new home)
- This option isn’t suitable if you need to sell your home to buy another.
Buying a home first
- Knowing you have secured a home.
- No pressure to find one.
- There may be no risk of having to put furniture in storage and knowing where to stay.
- The sale is subject to you selling your existing home, so no risk.
- You may have 30, 60 or 90 days to sell your home, depending on what contract terms you negotiate.
- You could have settlement on the same day.
- The seller you are buying through may not be very flexible on price or may not even consider a ‘Subject to Sale’ condition as this isn’t always attractive to vendors.
- You could end up paying a lot more.
- 99% of sellers will request a ‘Sunset Clause’ so they can continue to market their home in case of a better offer with better conditions (ie. Those that aren’t ‘subject to sale’).
- This puts extreme pressure on you as a seller to sell your house to meet the demands of that purchase so, you may sell your house for less as a result.
- You may have purchased at a price based on the real estate agents appraisal of your home sale, to only sell for $50K less, not being able to finance your purchase.
- You may outlay potentially thousands in costs and it falls flat.
Selling your home first
- Knowing how much you have sold for.
- Knowing how much you can now borrow or spend.
- Once the contract is unconditional, you’ll be in a better negotiating position with your next home purchase.
- Your home is presented in a better light with furniture for sale.
- No pressure to sell.
- Depending on the market, you may not find precisely what you want or what you are looking for in a new home.
- You may have to put everything in storage and find somewhere to stay or rent in between.
- You could be up for twice as many moves which can end up being costly.
Tips for buying and selling at the same time
If you are likely to be buying and selling at the same time, here’s 6 things to keep top of mind.
- Ask the agent for an extended settlement if you are buying before you sell. This can help if your place is not going to sell within the first one or two open homes.
- When selling first: if the buyer is an investor, renting your home back to you on a week by week basis can be helpful if you didn’t find your dream house to buy yet.
- If you are buying first: make sure your property is always ready to be put on the market (meet with few agents and ask what they would recommend you do with your property to have it ready for market).
- Understand what your property is worth – meet with a few agents to discuss what is achievable in the current market – be realistic with the figure in mind
- Understand your borrowing capacity clearly – engage a financial broker who will be able to help with your budget and loan pre-approval.
- Go to a few open homes in your suburb to understand what is currently on the market, at what price and how it compares to your home.
Should you sell or buy a house first?
This really depends on your personal situation.
If you need help deciding when you list your home for sale – or to get a feel for what properties might be coming onto the market soon – Northside Realty is here to help you.
Looking to buy, sell or rent property? With a professionally driven team and proven track record, Northside Realty are determined to get you the highest price. Contact Northside Realty today.