One of the regularly debated issues in residential real estate is whether it is best to sell first before buying another property, or better to buy something else before selling. This is the dilemma most sellers face once they have made the decision to place their home on the market, and unfortunately, there is no definitive answer. It depends on individual circumstances.
When Buying First There is No Urgency to Sell
When sellers plan to buy another property first, there is no urgency for them to sell their current property. They still have a comfortable place of residence from where they can search for their ideal next home. They are also in an excellent negotiating position, especially if the seller is under pressure to get a quick sale.
Buying first means no regrets for a missed opportunity. And if the circumstances are right, there is also the option for capital gain on both properties in a rising market. It also means that there is no nightmare rush to vacate the original property before settlement. This allows for a leisurely and stress-free move to the new property.
Some Words of Caution
However, there are some traps when taking this route. For example, securing a loan for the second property will place sellers in the position of having two mortgages. If the original property should be slow to sell, the financial strain may force a sale at a reduced price. Also, sellers may not have the option of buying first if their lenders require that the original property be sold first.
Our sales professionals at Bunbury Real Estate deal with these issues every day. They know whether market conditions are weak or strong, and if the type of property the client is looking for is available in their search area. Clients researching the pros and cons of buying first or selling first should discuss their situation with one of our sales professionals so they can make informed decisions.
Selling First Means Only One Mortgage at a Time
Selling first gives the owners time to research the market and settle on a price, and to prepare the property for sale. They have the flexibility of considering offers and negotiating settlement terms that suit them. Financially, they would be more attractive to lenders when applying for a mortgage for their new property.
Don’t Wait Too Long
Regardless of whether the market is moving or stable, the golden rule in this situation is, if possible, to buy and sell in the same market and not wait too long to secure the next property. If property prices rise sharply, sellers could be left unable to afford the homes they had hoped for. Neither choice of selling first of buying first is wrong provided all circumstances are considered before deciding.