This is almost an eternal question – Should you sell first and then buy or buy first and then sell?
Of course, there are no specific rules and everyone’s circumstances are different which leads to the actual answer being different for everyone. Buying first and selling second can potentially leave you with two mortgages. Selling first can leave you making a rushed purchase or needing to rent somewhere in between.
There is a third option – Settle on the same day. Serendipity… I hear you say. In a perfect world, the sale and purchase settle on the same day, paperwork exchanges without issue and all is well in the world. This however rarely happens and it mostly needs help to do so.
Here are some ideas to help you
Look at the market – In a rising market, it can be the perfect time to buy first and sell second. Buying at the start of the rise and selling at a higher price. Again you run the risk of not being able to settle and having a bridging mortgage or two mortgages. Also, there is a risk that you will accept a lower price as you become desperate to sell.
If there is a cooling market it is advised that you sell first and buy second. The pressure to accept a bad offer is reduced and you know exactly what you can afford to spend on your next purchase. However, you may find yourself renting if you can’t find the perfect property to buy.
Ask your agent – Working with one agent for the buying and selling increases your chances of buying and selling on the same day. Serendipity.
Extended settlements – By negotiating an extended settlement you increase the chances of a simultaneous settlement with your property’s. By negotiating 3 or 4 months you have the flexibility to work on getting the dates to match up. This can be tricky to agree to as the vendor may be in the same situation and need their own dates to work out.
Subject to completion – You can make an offer subject to completion. This means that your offer is only valid once your home is sold. While this reduces your risk it may not work for the vendor.
Bridging finance – Buying first and not selling your home will lead you to bridging finance. Typically interest only it is a loan on top of your existing home loan.
Make sure you do your research and decide on what will work for you. Contact us for your conveyancing needs and discuss how we can work with you to get your property settlements to occur on the same day.