Can I buy a house before selling my current home?

Buying or selling property is always stressful, but doing both at the same time can be overwhelming. Frank Valentic from Advantage Property Consulting runs us through some issues to keep in mind.

Property is probably the largest purchase for the majority of us, so it’s no wonder most people prefer to sell their house before buying another. But what if you want to buy before you have sold your current home? Here are a few things to consider before you do.

Speak to your lender

Start with the experts and those in charge of our loan first. The biggest part of property purchasing is seeking the finance to buy. You may be able to get a bridging loan from your bank or lender that will cover the costs associated with a new property purchase, until all the money comes through from selling your old house. It is essential that you seek professional advice from your lender and get pre-approval before doing anything else.

Ask for an extended settlement

Give yourself as much time as possible to get your current house on the market and sold. When negotiating on the property you want to buy, try for the longest settlement period that the vendor is willing to give you.

Be ready to sell your current home

Having your current house in tip-top shape and ready to sell will help with the stress and pressure. Momentum is part and parcel of selling property, so be ready to go. Time may be of the essence if you have bought before you have sold.

Understand the real value of the house you are selling

If you have found your dream home before you have sold the one you are currently in, make sure you understand the real value and potential sale price of the first dwelling. Do your due diligence and ensure you have the right team representing you. Don’t be caught in a shortfall by an inflated estimated price from an agent.

Understand the current market conditions

You need to know the conditions in the market before making the decision to buy before selling. In a declining market, if you buy first and then sell later, you could pay more for the new property and then achieve a lower sales figure when you sell later. However, in a rising market, if you buy first at a lower price and the market then increases in price, you could potentially benefit from selling later. Stock levels and the time of year could also impact on this decision, so you need to make an informed decision by doing your homework before proceeding.

 

Photo: Ashumskiy/Dreamstime.com

Disclaimer: this information is of a general nature and does not constitute advice. PRW recommends readers always seek professional advice before making financial decisions.