Should I buy or sell first?
So you’re looking to take the next step on the property journey…It begs the question should you buy or sell first?
In other words, should you sell the property you currently own before embarking on the home hunt, or purchase a new place and then put your previous property on the market?
It’s an important question, and the decision comes down to a whole host of factors, including the market, your personal circumstances, and more…
Buyers or sellers market?
The state of the market plays an important role in whether you should sell your current property before buying a new place, with the key question being: Is it a buyers or sellers market?
In a buyers’ market, there tends to be more properties available than people looking to buy them, which means properties often sit on the market longer and their price is open to negotiation.
In this market it might be wise to sell your existing property prior to purchasing a new one as it reduces the stress of having your existing home languish on the market and provides clarity about the budget you’ll be working with.
In a sellers’ market the opposite is true. There’s high demand and competition for each property, with properties snapped up quickly at higher prices.
In this market, people tend to purchase before they sell, if they can. This provides them with certainty around securing a new place, and also allows them to capitalise on demand for their existing property.
Finances
Finances play a huge role in any property purchase, and they also come into play when you’re transitioning from one property to the next.
Long before you start the property hunt, it’s important to understand your exact financial position, including whether equity in your current home can count towards your new property, and how much your lending institution will be willing to lend.
Knowing this allows you to work out whether it’s feasible to buy a new property before selling your existing one, and how that will look for you financially.
Pros and cons
There are pros and cons to both buying first and selling first and it’s important to weigh these up prior to making your decision.
Buying first
Buying first gives you certainty you have somewhere to move to. It allows you to start turning the page on the next chapter and facilitates a smoother transition between the two properties.
It can also put you in a better position when it comes to negotiating because you have the luxury of time.
On the flipside, it might limit your budget, and there could be substantial financial outlays as you cover two mortgages in the changeover period.
In turn, that might force you to rush the sale of your existing property.
Selling first
Selling first gives you a clear understanding of your budget. It also gives you the power to act quickly when you find a property that piques your interest.
That said, it can also be stressful in other ways. For example, where will you live in the interim? This lack of housing security might see you rush the next purchasing decision, or have you outlaying money for rental accommodation.
How we can help
If you’re considering buying or selling a property and seeking to understand the current market conditions, why not chat with one of our friendly agents to understand how we can help?
Or feel free to enter your address below to get your instant property estimate.
We’re not just about property, but the people and the stories behind it. You can also view our list of currently available properties here.
