Should you sell your current home before you buy a new property? Or should you buy a new home first and worry about selling your current one later?
It’s an important decision, and there are certain benefits and risks associated with both options. Whether you’re upsizing into a bigger home or downsizing into a more suitable property, it can be a hard question for a lot of people to answer. That’s why we spoke with Aaron Papahatzis from Peter Blackshaw Queanbeyan, to get his advice on how to determine which is the best option for you.
The benefits of selling first
One of the major benefits of selling first is that it can make the whole sales process a lot easier. It means you can take your time and you don’t have to rush the process. Because you won’t need to sell quickly, you won’t feel like you have to take the first offer that comes along. Instead, you can afford to wait for better settlement terms or a better price.
Typically, there is also less financial risk when you sell your current property first. It means you won’t find yourself stuck in a situation where you have bought a new property, but haven’t been able to sell your first home and have to pay off two mortgages at the same time.
The drawbacks of selling first
On the other hand, when you sell your existing property before you buy a new home, it can place added pressure on the buying process.
Depending on the settlement terms you negotiated with your buyer, you may not have much time to find a new home before you have to move out. If you can’t find a suitable home right away, you might have to rent for a period of time while you continue to look. That might mean you have to move twice in a relatively short period of time when you do find a new home you love.
The other issue to consider, is that there could be a property on the market right now which might be an ideal home for you, but you may miss out because you’re not in a position to buy.
The benefits of buying first
If you decide to buy first, the situation is essentially reversed. It will make the process of searching for and buying a new home a lot easier and less stressful.
You will have plenty of time to house hunt, so you can afford to be picky and look around for a property that meets your needs. It won’t be an issue if there’s nothing suitable on the market straight away, you’ll be able to wait for the right opportunity to come around.
The drawbacks of buying first
Once you’ve bought a new home, depending on your circumstances, you might be under a certain amount of time pressure to sell your old property. This has the potential to create additional stress around the sale.
It can give you more to think about in terms of timing and pricing, and you might feel as though you have to compromise on the results you want, in order to achieve a sale in the time you need. However, with a good agent, the right marketing and a strategic sales campaign, this sort of situation can be avoided, but it is still something you should be aware of.
So what is the right option for you?
The question of whether to buy first or sell first is a common dilemma faced by homeowners, and the answer is really going to depend on your individual circumstances. You need to take into consideration your financial situation, whether you are upsizing or downsizing, and your personal preferences.
Upsizers, for example, typically won’t have built up as much equity in the property they will be selling, which can limit their options. Depending on your income and savings, you might need to sell your property first in order to be able to afford to buy a new one.