When you’re looking to move to a new property, the usual dilemma is whether to sell your current home first before buying a new one, or vice versa. Both options come with their pros and cons, and are each risky in their own right.
However there is a third option, for those who want to get the best of both worlds while minimising the costs: do both processes simultaneously.
How do you time your settlements in such a way so that they don’t overlap and leave you at a disadvantage as either vendor or buyer? Here’s the ideal way to go forward:
1. Keep tabs on the market
Watch the trends and make your move to sell when demand is picking up and prices are jumping. This allows you to maximise the value of your property. Then if possible, consider buying into a market where competition is less robust, allowing you to snag a nice home at a lower price. Doing your research well is the key to this secret! Of course, you can only wait for so long between settlements without complicating your living situation, so you need to keep up with your due diligence and connect regularly with local real estate agents.
2. Extend your settlement date
Both parties generally negotiate over the date of settlement in the contract of sale. To give yourself adequate time to find a new home, you can suggest a long settlement period of up to several months. If suitable, you can also ask your conveyancer to include a clause that allows you to bring the settlement date forward (provided you give your buyer a few weeks’ notice). This would make it parallel to the settlement date of your new property.
3. Put in a conditional offer
This type of offer calls for the purchase of a new property to be contingent on the sale of the old one. You simply ask your conveyancer to include a clause in the contract that makes the purchase “subject to” the sale of your property. This gives you leeway to get your current home off the market while ‘reserving’ your next property. The risk here is that some vendors may not be willing to accept conditional offers, given the lack of certainty attached to them. As an alternative, you could apply for a bridging loan, which allows you to “own” two properties simultaneously. This loan provides you with funding for a new place while you wait for your old home to sell, though the interest rates are generally quite high.
Timing your settlements to fall simultaneously when buying and selling property can be a tricky business, but it’s not altogether impossible. At Think Conveyancing we’ve worked on some challenging transactions and worked with our clients to meet conflicting and chaotic deadlines: it’s all part of the process of conveyancing. We’re always on hand to help you with the legal process of buying and selling property, so if you’d like to speak with a member of our friendly team for an obligation-free chat, contact us today on 1300 932 738 or request a free quote online.