Can I buy a house before I have sold my current home?
By Advantage Property | 5th Sep 17
What are the fundamentals I need to consider?
Property purchases are probably the largest purchase for most of us, so it’s no wonder most people prefer to sell their house before buying another. But what if that situation isn’t yours and you want to buy before you have sold your current home? Here are a few things to consider before you do.
Speak to your bank or lender about pre approvals or a bridging loan
Start with the experts and those in charge of our loan first. The biggest part of property purchasing is seeking the finance to buy. You may be able to get a bridging loan from your bank or lender that will cover the costs associated with a new property purchase until all the money comes through from selling your old house.
It is essential that you seek professional advice from your lender and get pre approval.
Ask for an extended settlement
Give yourself as much time as possible to get your current house on the market and sold. When negotiating on the property you want to buy, try for the longest settlement period the vendor is willing to give you.
Be ready to sell your current home
Having your current house in tip top shape to sell will help with the stress and pressure. Momentum is part and parcel to selling property, so be ready to go and have your house organised and primed to sell. Time may be of the essence if you have bought before you have sold.
Understand the real value of the house you are going to sell
If you have found your dream home before you have sold the one you are currently in, make sure you understand the real value and potential sale price of your property. It’s not the time to be sold by over estimating agents, do your due diligence and ensure you have the right team representing you. Don’t be caught in a shortfall by an inflated estimated price from an agent.
Understand the current market conditions
You need to know the market conditions before making this decision, otherwise your decision could be impacted. In a decling market, if you buy first and then sell later, you could pay more for the new property and then achieve a lower sales figure when you sell later. However, in a rising market, if you buy first at a lower price and the market then increases in price, you could potentially benefit from selling later. Stock levels and the time of year could also impact on this decision, so you need to make an informed decision by doing your homework before proceeding.
If this buying before selling is the route you are going to go down, let us help you ensure the process is as stress free as possible by finding the right representation and selling strategy for you!
*This information is of a general nature and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances