Thinking of moving and don’t know whether to sell or buy first? You’re not alone. The majority of homeowners wonder whether it’s better to sell their home before buying a new one or wait until they have found a new home to put their current one on the market. Unfortunately, there is no definitive answer—there are advantages and disadvantages to both options.
Perhaps the biggest advantage to selling your property first is knowing how much money you can spend on the purchase of your new home. Many homeowners wait until they have an unconditional contract on their home before looking for a new one. The tip here is to give yourself plenty of time to find another property. One way to do this is to have a longer settlement period written into your contract. This gives you time to purchase a new property before you have to move out of your current home.
If your property sells before you have found a new home, you may need to arrange temporary accommodation. Rental accommodation could cost you more than your current mortgage repayments. A quick sale could leave you feeling stressed and in a hurry to find a new place to live, and you may regret your rushed purchase later.
On the other hand, if you take your time over buying your new home the local property prices could increase in the time it takes you to find it. Then again, the reverse is true, property prices could also decrease in this time. However, the Gold Coast property market has been steadily increasing and is tipped to continue doing so.
Buying your new home first means you can spend as long as you like searching for the ideal property and you won’t be stressed if your current home sells quickly. If you have equity in your current home loan, you may be able to use that as a deposit on your new place. Again, opting for a longer settlement period gives you time to try and sell your current property.
If you buy first, you may have to organise a bridging loan. Bridging loan structures vary according to the lender but most have a set loan period, meaning you need to have sold your property before the term ends. This can leave you feeling pressured to sell your current home quickly. Time constraints may see you accepting a lower offer than you otherwise would. If you sell your home for less than expected, you will have to look around to fund the difference in costs.
A third option is to make your offer to purchase conditional upon the sale of your current property within a specified period. Conditional offers usually include a clause allowing the seller to remain open to other offers while you try to sell your home. While a conditional offer provides a middle ground, you could lose the property if another buyer makes a more attractive offer.
As you can see there is no right way to purchase a new home. There are pros and cons to selling or buying first and it all comes down to your personal circumstances.