Which Came First, the Chicken, or the Egg?

An age old question, and one that may seem equally confounding as ‘should we sell our existing home before buying a new one?’

To further confuse matters, the question can actually be broken down into two:
a) Should I put my house on the market before finding a new one?
b) What are the ramifications of buying a property before selling my existing one?

The system for buying and selling houses can be (as once described to me by an American realtor with 23 years’ experience) ‘archaic’. You don’t want to incur extra financial burdens, but you need to move. You don’t want to miss out on the house of your dreams, but you don’t want to sell without having somewhere to move on to. It can sometimes feel akin to taking a leap of faith and hoping it all works out. This is why it is imperative for your agent to advise and guide you correctly. It is essential for you to have a solid understanding of the options before making any decision.

Should I put my house on the market before finding a new one?

The pros and cons are generally specific to the individual. Are timeframes a factor (jobs, schools)? Are houses selling well in your area? Are they selling better in the area you would like to move to (i.e. are they likely to come and go before you sell your own)? What should I do if I sell and can’t find somewhere? All of these concerns are entirely valid, but perhaps pause for a moment and consider what would be worse for you; having a buyer, but nowhere to go, or finding the house of your dreams and being unable to buy it? In our experience 100% of sellers fear the latter more.

In all the excitement and worry of selling a home, many sellers forget it is they who dictate the terms, the pace, and the price at which they sell. If you want to sell, but have nowhere to move, then that is the basis upon which you are coming to the market. Your agent needs to inform viewers prior to showing them the property that the seller (i.e. you) has yet to find, and that time frames, therefore, have yet to be established.

Sounds simple? That’s because it is. Remember your buyer is just like you. Your house is their dream home, and they have all the same drives and concerns as you. Provided that all intentions remain open and honest, many people are willing to offer a degree of flexibility, which will in turn help you in taking that next step to secure your next home.

Slightly more uncommon, but still of practical concern is the latter question:
What are the ramifications of buying a property before selling my existing one?

If you are able to finance independently (i.e. without the need to sell your existing dwelling) it will put you in an enviably proceedable position when it comes to buying your new home, but there are additional factors to be considered:

* Borrowing — the most obvious. If you are obtaining a loan or re-mortgaging, then there will be additional payments to make, e.g. stamp duty; there is an extra 3% to pay on top of the normal stamp duty rate. You may be eligible for a refund if you sell your main residence within 36 months, but it does, of course, mean you need to find the additional funds in the first place.

* Risk — the market is fluid. If you find yourself in negative equity, or are unable to sell your main residence in the allotted period, you could stand to lose a substantial sum. If you do decide to explore this option, you should certainly speak to a qualified Financial Advisor.
Working together with your experienced agent will enable you to decide which is the right option for you, ensuring you are well informed to take the next step.


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Polly Greenway

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