I often being asked “which one is the best way?”
Today, I would like to talk about the pros and cons about selling a house first or buying a house first.
I believe if you understand all the scenarios, you can make a right decision to suits your needs or your personality, and no matter what happens in the future, you wouldn’t regret the decision you make.
Buying a house first and selling after that
+You feel secure that you have a place to move next and knowing what you can do.
-You may need to organize a bridging finance – when you sell – to suits the settlement date.
-There is no guarantee that the market is the same ( it can be changed quickly. If the market is the same then that’s great! But if the market is going downwards then you won’t be able to achieve the price that you wanted to achieve.)
-You have to have a longer settlement to buy in order to sell your house. It may not meet some vendor’s ideal settlement. (If so you can do bridging finance, if possible)
– If the property is “Price by negotiation”, either you request a longer settlement or make a conditional offer on “selling of your house” which is really unattractive to the vendor.
– Because you have purchased, you would be in the position of “have to sell” situation. = it would put you under huge pressure.
Selling a house first and buying a next home afterwards
+You know exactly how much you can spend up to. (no guess work)
+You don’t need to worry too much about whether your house would sell or not compared to people who already bought a house unconditionally.
+settlement date for the next house can be flexible if the purchaser of your house is willing to negotiate to change the settlement date.
+ if the property is “Priced” or “Price by negotiation” then you have a strong position to make -“cash and unconditional offer” if you want to.
– Spring or Summertime (it depends on the period) will be more property on the market (a lot of people want to sell when the weather is good to show off their house) – However, more houses means buyers in the market place will be spread out to many properties and will be less competitions = can be limited to achieve the best possible price.
– You may need to compromise for the next house if there is not many choices in the market place.
– If you cannot find a house that you like, you may need to find a temporary accommodation.( again, if the market is the same you wouldn’t have any problems but if the market goes up then your choice of next home will be limited.) = better to buy and sell in the same market, ideally.
Every single person has a different view. I would like people to know what might happen in both scenarios and be ready for the new journey!