12 Dec 2011
A question that comes up a lot in real estate is whether or not it’s better to buy or sell first.
Logically it makes sense to sell first. If you sell first then you know exactly how much money you have to spend on your next home, plus you can hold out until you’re offered the price you want.
The problem with selling first though is that you may be left with limited time to find a new home. If you sell up before buying your next property, chances are you will find yourself renting if you don’t find a place quickly, and you don’t want to be pressured into finding somewhere in a rush just because you have nowhere to live!
One option is to have an extended settlement to give you time to purchase a new home or of course you can go with the option of buying first.
If you buy first you have more time to look around for your next property, but buying first has its drawbacks too.
Buying before selling could mean that you will accept a lower price for your home so you can hurry up and move on. If you buy first you may also find yourself needing to get a bridging loan to finance two properties at the same time.
There is the option when buying first to make your purchasing contract subject to the sale of your current home but not all vendors will accept this.
Also worth considering when deciding to buy or sell first is current real estate market conditions. In a falling market you would want to sell first so you sell for a higher price and buy at a lower price. If you did it the other way around then you could be losing money. In a rising market of course it makes more sense to buy first and then sell later.
Timing is very important when you are buying and selling and whether you buy or sell first, it can be hard to get your property sales in sync.
If you have an offer that is too good to be true or have found your dream home then maybe your decision has been made for you. But these are just some points to consider if you are trying to figure out which option is best for you.