The only thing constant in life is change, the saying goes. Families grow, careers shift and at some point, you outgrow your home, marking the time to move on to a new property.
However, a question that will likely be at the back of your mind is whether or not you should let go of the old home first before you get to the new.
There are, after all, many things you need to address before you sell a house, and a lot of paperwork to deal with if you’re going to play the role of both vendor and buyer.
There are several pros and cons for selling your current property first before buying again:
1. You can focus on adding value to your current property
You generally can’t just sell your property as it is and still get a good price for it. There’s some renovation and improvement work in store in order to make your dwelling presentable to the eyes of potential buyers, and you need to allot both a budget and a chunk of time to making this happen. Handling the selling costs first also keeps your budget from getting distracted by the payments required for a new property, such as for third-party services and loans.
2. You have money in the bank
Selling first adds a big amount to your bank account, and allows you to budget appropriately. Moreover, vendors will almost certainly be more willing to entertain a buyer who already has funding. You will also be able to negotiate more forcefully knowing that you have time and money on your side, especially if the vendor is looking to make a quick sale.
3. You may have some leeway on settlement dates
By selling first, that doesn’t necessarily mean you have to move out quickly. Together with your conveyancer, you may be able to negotiate a clause in the contract that allows for a longer settlement or a rent-back period while you find your new home.
1. You may not have a new home right away
If you decide to buy after you sell, the market may not necessarily have what you want on short notice. This means you’ll be forced to take out a short-term rental until you find your dream home, adding an unexpected hit to your budget (not to mention a double-move).
2. Rising prices may become your enemy
If you start your search during a boom period where dwelling values are soaring, you may end up having to pay a whole lot more for a good home. This is a big risk you’ll encounter especially if you have a rental period to ride out.
If you do decide to sell your house first, it’s recommended that you don’t take too long between the selling and buying processes. This way, you should still have a good idea of how the market is moving. Be sure to research and prepare the necessary documents early in the process, so you’re prepared to move immediately once you do find the right home.
At Think Conveyancing we’re always on hand to help you will the legal process of buying and selling property. For an obligation-free chat about your situation, contact our friendly team on 1300 932 738 or request a free quote online.