Oct 29, 2015
Selling your property before you buy does have risks involved but it can also have huge advantages and put you in a greater buying position with negotiating powers.
Advantages of selling your house before you buy
- You’ll know exactly how much money you have to spend on a new property. Rather than an estimation of what you will achieve for your property as you will already have the funds in the bank from the sale of your property
- It puts you in a much stronger buying position. You will effectively be a cash buyer (and/or have a pre-approved mortgage) and will therefore have an advantage over another buyer who still has a property to sell or is a chain
- You might be able to purchase the property for a lower price if the seller is keen to move quickly
- You are more likely to achieve a better price for you own property as you are not pressurized to sell. I can also be a lot less stressful process as you are in no rush and have no one above you in a chain adding pressure for sale
- If the market house prices are falling you can benefit from the houses getting more affordable as you search for your perfect home
Disadvantages
- You may be disappointed if you can’t find a new property straight away, and time can cost money if you are having to rent somewhere
- Renting somewhere might mean downsizing so you might therefore have to put your belongings in to storage, which can be costly
- Going in to renting accommodation is effectively ‘dead money’
- If the market is on the up a new property could end up costing you more than it would have at the time of you selling
- Renting can be stressful and costly but being in a chain, overlooked or feeling like you have undersold your house could be worse
Tips
- Be organised by having your mortgage, solicitor etc. in place and be in a position to buy straight away so you can buy quickly
- Get your mortgage pre-approved, this will make you more appealing to the seller
- Develop a relationship with as many Estate Agents possible, so when new properties come on to the market they will think to pick up the phone to you
- Keep an eye on the property market, just in case that perfect house comes on to the market. Also keep an eye on the house prices in case they are increasing and you need jump in and buy something