In the course of your life, you may be faced with a difficult decision: buy a new home or hold off until the sale is complete? At different stages in our lives, we will want to upsize or downsize homes. In these big decisions, there are two options – buying before selling (and risking that it won’t sell) and waiting for the house to go on the market first (which could take longer). Ask a buyers agent and they’ll often tell you that it can often depend on what stage of life you’re at. Both options offer advantages and disadvantages depending upon individual needs.
It’s one of most homeowners’ hardest decisions—whether they should wait till their current house has sold before purchasing another property, or if they would rather purchase now while property prices are favourable. Experienced professionals like a buyers agent, real estate agent, or even a financial planner can help steer you in the right direction with the right guidance and knowledge.
Key considerations when you’re thinking about buying or selling your home
- How much risk can you handle?
Which strategy should you follow when buying or selling your home? Do you prefer to take the high-risk option of first purchasing a property and then making it available for sale, or would rather have more certainty by listing your house at an agreed price before searching for another one? This decision largely depends on how much risk is comfortable with taking as there are pros and cons associated with each approach.
- What is the reason you’re trading your home for another
If you are about to embark on a family journey, one of the most important considerations is finding an appropriate property that suits your needs. If time and money aren’t in abundance right now but it’s going to be soon enough, make sure this process isn’t rushed when buying. A buyers agent can help advise you on the right time to buy. You’ll want to find something before either personal or familial factors force you out into unfamiliar territory with ageing parents – where they may not even have any other children nearby for the support. This should definitely factor into the decision-making process: if there are no kids running around yet (or ever will!), then maybe consider a townhome/condo instead; only buy for what you need today while considering future generations too.
- Are you keeping up with the property market?
Understanding the market’s cycles can help you make more informed decisions about your property. Knowing that a certain area is experiencing high demand for housing, or if prices are on the rise, will give you confidence in a purchase and you’ll know you’re not overpaying at this moment in time.
Understanding how markets fluctuate helps homeowners plan ahead so they don’t miss out when an opportunity arises. Look into different areas to see what trends exist. Knowing which region has seen price rises recently may save you from buying too soon with fewer potential buyers looking to buy homes there now. A qualified and experienced buyers agent can carry out a detailed assessment of the market to help guide your decision.
Your options for selling
A buyers agent will tell you there are a lot of risks involved in purchasing property before selling. This could leave homeowners under a lot of stress, as they may need to arrange bridging finance or sell assets to be able to make the purchase before finalizing the sale of their own home. These factors complicate things and it’s important that you stay on top of everything from costs, timing issues, and risk management
Advantages of selling first
- You can come to an arrangement for a delayed settlement to give you extra time
- There won’t be so much financial pressure to sell the house as soon as you can
- You won’t be forced to lower your asking price for a quick sale of your property
Disadvantages of selling first
- If you can’t finalise the purchase of a new home quickly, you may have to spend more on a rental or temporary storage for your belongings
- If house prices increase after you sell, you could end up being priced out of the market
- The purchase of your next property is dictated by what’s available on the market after you sell your home
Your options for buying before selling
Ask a buyers agent in Melbourne and they’ll tell you that buying a property before selling is often a less risky and stressful option. After selling a property you have a better idea of exactly how much you need to sell your home for. Doing things this way can be more financially taxing but in a lot of ways, you won’t be rushed.
Advantages of buying before selling
- You could have the option to negotiate a conditional offer that’s subject to your property’s sale first
- There’s less pressure to buy a property in a short amount of time, so you’ll have more time to make a good choice
- Rising property prices means you could get a better deal when you sell your existing property after initially buying a new one
Disadvantages of buying before selling
- Juggling the costs and the pressures of bridging finance while managing two mortgages
- Conditional offers are often far less appealing to sellers because of the high level of uncertainty
- You may have to put in larger offers to convince sellers while you’re waiting for your house to go on the market.