To buy or sell first?Mon, 15 Mar 2021
This question is a common dilemma amongst homeowners - do you buy your new home first? Or sell your existing one before you buy? To help out, we’ve outlined the pro’s and con’s to both, to enable you to make an informed decision based on your circumstances and the market condition.
In a buyers’ market, buying your ideal property first will be your best bet as supply exceeds demand. One of the main indicators of a buyers’ market is when property prices are stagnant or slowly declining which forces sellers to drop their asking prices to gain an advantage in the market.
Whereas a sellers’ market arises when demand exceeds supply, resulting in sellers having the ultimate advantage. These market conditions often make buyers willing to spend more on a home than they would otherwise.
Pros of selling first
- You can extend the settlement date to allow time to find a property.
- You know exactly how much money you have to spend on your next potential property.
- More leverage when it comes to negotiating a sale price for your current property as there is no urgency.
Cons of selling first
- May be forced to rent while you look for a suitable new home which can be highly inconvenient and costly in the long run.
- The risk of facing an extended gap between sale and purchase and rising property prices.
- Places pressure to purchase your next property quicker which may result in having to settle with a place you’re not in love with.
Pros of buying first
- Avoid the hassle of renting in the interim period.
- It lets you lock in your purchase at today’s prices whilst allowing you to sell your property at a date when prices are expected to be higher.
- Gives you the freedom to find a home that’s right for you before fully committing to selling your current one.
Cons of buying first
- If your current property doesn’t sell in the expected timeframe, you’ll be in the dire situation of paying off two mortgages
- Immense pressure to sell the existing property quickly when a new property has already been purchased can result in you taking a price below what it could sell for given time.
Still unsure on which strategy works for you? Reach out to the Croll team today who are there to help guide you on the right path when it comes to making such a big decision.