Should I Buy or Sell First? Buyers Agent Tips
Buying or Selling Your Home
It’s one of the most difficult decisions homeowners will make: Do I buy a new home before selling my existing one, or wait until it’s sold?
Along the different stages of life, most homebuyers will consider moving location, upsizing or downsizing their homes at some point. So, when it comes to making this big decision, how do you decide which course to take?
According to numerous property experts, these are the three top questions to ask yourself when faced with the important decision between buying now or selling first.
Deciding whether to buy or sell first largely reflects on your personal preference for handing risk. Buying before selling is the higher risk option, as you may not know when your house will sell, or how much for. Buying first might be the best option if you have a high-risk threshold, as it can be profitable to wait and sell your house in a rising market. If you are likely to be deterred by risk, selling your house first can eliminate the possibility of spending more than you can afford. When taking this path, be mindful of changes in housing prices and that selling can potentially take a long time. Advice from a professional buyers advocate will help clarify the best approach.
Is your family growing, or do you need to move closer to ageing parents? If personal and family factors are on the forefront of your mind and just can’t wait, it would be beneficial to purchase a suitable property that is the right size and location before your existing home sells. One point to consider is that in high demand areas, it may take time to find a suitable property at a price you can afford. Ponder your personal circumstances and the urgency of your move, and then you will have a clearer idea of the method you should follow.
You would be less likely to purchase an item today if you knew it would go on sale at a reduced price tomorrow. While cheaper housing prices aren’t guaranteed like an advertised Black Friday sale, you can keep informed of the market trends and predictions to gauge your next move. Having access to the market’s cycles will give you an indication of how well your house will sell and if either house’s value is on the rise or decline. If property prices are rising, the risk in purchasing first is lessened, as your house in a high demand location is likely to sell more easily. In contrast, if you’re thinking of selling when the market is falling and comparable houses are taking a long time to sell, the outlook for a timely sale of your property is slim.
We know there are risks involved with purchasing a new property before selling, and this could leave homeowners under a lot of stress. When buying first, homeowners might need to arrange bridging finance or sell assets to be able to make the purchase before the sale of their own home is finalised. These factors complicate the purchasing process and homeowners must stay on top of the costs, risks and timelines involved.
Pros of Selling Your Home First:
- If you can agree on a delayed settlement, this can grant you extra time to buy your new home and maybe even move within that timeframe.
- There’s less financial pressure to sell the house as soon as possible.
- It means you don’t have to lower your asking price for a quicker sell, as potential buyers won’t be cashing in on your desperation.
Cons of Selling Your Home First:
- If you are unable to find or finalise the purchase of a new home quickly, you may have to spend money on a rental, furniture storage or be left with nowhere to go.
- If prices inflate after you sell, you could be priced out of the market or face missing out on your ideal home.
- Your purchase is dictated by what’s available after the time you sel.
Pros of Buying Your Home Before Selling:
- You may be able to negotiate a conditional offer, subject to your property’s sale to lessen risk.
- There is less pressure to purchase a property quickly, therefore you can take the time to find the right property.
- A rising market means you could get better value for money, and sell your existing house after prices have further inflated.
Pros of Buying Your Home Before Selling:
- Juggling the costs and pressures of bridging finance while managing two mortgages at once.
- Conditional offers can be less appealing to sellers as there is a level of uncertainty.
- You might have to offer higher than you want to convince an owner to reserve a property for you while your house is on the market.
The best way forward really depends on your situation. To get expert advice on whether to buy or sell first, talk to Property Mavens, Melbourne’s leading buyer’s agents. Property Mavens can also provide a range of opportunities to acquire property both off and pre-market via their well established agent networks. To find out more about buying property in Melbourne, contact our friendly team of buyer’s agents / buyer’s advocates.