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Deciding whether you should buy or sell your house first should be based on your finances, moving timeline and the market conditions of your current and future homes. Buying and selling real estate are both stressful exercises. If you have the financial security to own two homes at once, then buying first is a convenient option that avoids multiple moves. The worst-case scenario would be to buy your dream home and then face the nightmare of selling your existing one for much less than you were counting on. There is a simple principle to use when deciding whether to buy first or sell first, but there’s a bit of groundwork you need to do before applying it.

Step One

It makes sense to buy before you sell. Find out how much money your bank will lend you and whether you can borrow enough to cover owning two properties for a period of time. If they will give you bridging finance, for instance, you’ll need to understand the costs and whether there is a time limit. If you cannot fund more than one property at a time, the answer to whether you should buy first or sell first is a given: you need to sell before you can buy.
If your bank will lend you the funds, then you need to consider market conditions before deciding to buy before you sell.  See step two.

Step Two

Fundamental to your decision is whether the market conditions at the time favor the buyer or the seller. Are you buying and selling in the same market?

– City and regional markets can differ substantially and getting the timing right (or wrong) will have a much greater impact on your financial position.
The simple answer is to do what is hardest first. If you are moving out of a market where it will be easy to sell and into a market where it’s difficult to find the perfect home, then I’d suggest that you buy before you sell. If you have the type of home that has a limited buyer pool, you might be better off selling first.
– If you are buying and selling in the same market, then market conditions will dictate whether it’s best to buy first or sell first.
In a buyer’s market you will find it harder to sell than to buy, therefore from a real estate market standpoint, selling before buying makes the most sense for people who are selling in a buyer’s market. You know your current home may take longer to sell, and you probably don’t want to or can’t afford to pay for two homes for an extended period of time. By selling first you will know precisely how much money you will have to spend and it will give you the luxury of time, You can wait until you get an offer you’re satisfied with, without the pressure of knowing you already bought (or are in the process of buying) a new house.

When in a seller’s market, it stands to reason that you are going to find it easier to sell, so in most cases, it’s better to buy before you sell. When you look to buy there will be a scarcity of property to choose from and fierce competition from other buyers. If you sell first you run the risk of a long lead-time before securing your next property. You may also have to rent in-between transactions, Having to move twice is perhaps the biggest inconvenience of selling first. It will cost more than doing a single move, and you might have to put some of your belongings in storage if your temporary housing can’t hold all your stuff. Many buyers in this situation find themselves tempted to make a panic purchase, which they could live to regret all too quickly.
In a seller’s market, there is another compelling reason to buy before you sell. When prices are rising, if you don’t buy back in quickly, you run the risk of being priced out of the market.

One of the ways I guide my clients through the dilemma of whether to buy first or sell first is to help them gain clarity about exactly the sort of property they will be able to buy. Often people have unrealistic expectations, so it’s important that they start from a position of knowledge. Even if you cannot get bridging finance and don’t have the option to buy before you sell, knowing what and where to buy before you even list your property for sale will give you a distinct advantage. It will allow you to hit the ground running the moment you find a buyer for your place.

Call me for any advice you may need!

Hopefully you won’t have to compromise at all.

Tackle price first.

You’ve probably already determined how much you’re willing to pay for a home, How much more  would you need to add to your budget to be able to afford your dream home? Is it achievable? if not, you’re just hurting yourself by imagining yourself in it. So, to avoid temptation, it’s best to restrict your house-shopping to properties in your financial neighborhood. If  you need to stretch yourself, you may as well do it now. If you can’t afford to push the budget or you are not prepared to, then move to the next “P”.

Let’s look at the property characteristics.

A property that is finished to a high standard will obviously be reflected in the price, Perhaps you need to surrender the requirement for off street parking or that spare bedroom (how often do guests really come to stay??). Or maybe you can live with that dated kitchen or bathroom for 5 years.  This is all about asking yourself how important location is and what you’re prepared to compromise on in order to live in your ideal suburb.
If you absolutely, positively cannot compromise on the size, style, scale or condition of the property, then it’s time to reconsider the position.

Position (location).

The position you choose will largely depend on your priorities, what you’re prepared to sacrifice and what’s non-negotiable.
“You’re looking at a very different lifestyle in a property positioned within 10 km of the CBD (central business district) compared to something that’s 25 km out.
Sometimes it is as simple as widening the search area. Many buyers are comfortable looking in an area that they are familiar with. If it looks like the budget won’t stretch to your dream home in your desired location, i encourage you to identify what it is that you like about your current locale and see where else you may be able to create a similar experience. Is it The surrounding countryside? The dominant architectural style? The local shopping center? Good schools? Your nearby friends?

Property Buying advice

If there’s one thing I’ve learnt as an agent, it’s that every person is unique and has unique plans and priorities around home ownership. The key is to realistically consider your lifestyle and what’s going to make you happy, have access to public transport, cafes and malls? or not having access to the same amenities, but you’ll be able to buy a three- or four-bedroom home if you’re planning a family – give children more room to run around.?
The quicker you decide what to compromise on when buying an apartment, the quicker you will find yourself in your new home. The only alternative is to go back to step one and find yourself some more money.
Compromise is not always negative when it comes to home buying and is often a part of the search journey, you purchase a property only once you are armed with all the necessary facts.
To discuss how i can assist with your property search please contact me.

Call me for any advice you may need!