When it comes to moving you will most likely be trying to decide whether to sell or buy first. Timing and market conditions are strong factors contributing to this decision. In an ideal world you would want to sell your current property and buy your new one at the exact same time but unfortunately it rarely happens like that. In order to determine which strategy may be best situated for you it is important to weigh up the pros and cons for each option.
Selling First
Pros
- Selling your home first is less financially risky because it allows you to know exactly how much you have to spend on your new home.
- By selling first you are better situated to make a sale. There’s no pressure or urgency to sell by a certain deadline which gives you time to market your property effectively and you can wait until you are happy with the sale price of the property.
- There is no need to apply for a bridging loan to finance both properties
Cons
- If you sell first you may be forced to rent until you find your new home meaning you will need to move twice. This can be stressful. You will need to pay rent along with the cost of moving and storage space which can add up.
- You may rush your buying decision and feel pressured to find your new home and end up settling for something that is not perfect.
- There is always a possibility that property prices will rise between the time you sell and the time you buy a new home. You may end up spending more on your new home that what you received from selling.
Buying First
Pros
- You can spend all the time you need to find your new home and negotiate on the price before you buy.
- You will have the certainty of only moving once unlike selling first and not having a home to move into straight away.
- You can take as much time as you need to sell the old one. You can increase its appeal to achieve a better selling price while you live in your new home.
Cons
- If you buy a new home without selling first you will have two mortgages to pay as well additional fees that come along with owning two properties.
- You will also need to be able to put down money for a deposit on a new property, without yet having the money from selling your property to help.
Market Conditions
Factors such as interest rates employment, rises in living cost can all change the market conditions. These factors will influence both seller and buyer demand. It is important to know what market you are selling in as it can affect the sale price.
Seller’s Market
A seller’s market is when demand for homes exceeds the amount of homes that are available for sale. In a seller’s market, you are more likely to sell your property for a higher price.
Buyer’s Market
A buyer’s market is when the number of homes available for sale exceeds the number of buyers who are looking to buy. In a buyer’s market, you need to ensure your price is realistic, appreciate it may take a little longer to sell and ensure you work with your real estate agent to maximise your selling price.