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Sell first or buy first? The eternal question for St George homeowners

This common question of “Can I buy a house before selling mine?” has become a common dilemma. So where do you start?  Well, first you need to be aware of current market trends. Are prices rising or falling? If they’re rising ‒ and rapidly ‒ then it’s wise to lock in the price of your new home before selling. When prices are falling, you need to extract the maximum value from your home now in the knowledge that your dream home may be less expensive when you’re ready to buy.

Can buying before you sell work?

In the current market, where demand is high and home prices are rising rapidly, buying first makes sense. That is, if you can find a property to buy. Buying first means you aren’t pressured into buying a home to live in because you’ve sold your home. Once you’ve locked in a price and purchased a new property, you have time to prepare your home for sale to achieve the optimum price. Remember, home styling, kerb appeal and general presentation will help you appeal to the maximum number of buyers and achieve a record price.

What are the risks of buying before selling?

When you buy before you sell, you do run the risk of not selling your home before you settle on the new property. This can cause financial hardship unless you’re well-prepared. So before you rush out to buy your new home, ask yourself:

• Are you ready for all risks?
• Do you have an accurate appraisal of your property?
• What’s your property selling timeline?
• Do you have a contingency plan in case something goes wrong?

Pros and cons of buying first

Pros

• You won’t be homeless as your new home will be waiting for you.
• Buying first in a rising market locks in a lower price and hopefully you’ll sell your property for a higher price later.

Cons

• If you can’t sell within the settlement time for your new property, you will be carrying two mortgages. However, you can mitigate this issue by asking for a longer settlement period.
• You could overestimate the amount your home will sell for, and buy a property that is way out of your price range, leaving you with significantly higher debt.

Selling first before buying

This option is often considered to be safer than buying first. After all, you know exactly how much money you have to spend on your new home. However, this strategy really depends on market forces. When prices are falling, it makes sense to get the maximum value for your property in the hope that the prices on properties you love will fall further by the time you’re ready to buy. Again, there are pros and cons to this strategy.

Pros

• This option is less risky and can be less stressful.
• Once you’ve sold and know what you have to spend, you’re in a stronger position to negotiate the price on your new property.
• You will be confident about what you can and cannot afford ‒ ensuring you don’t stretch yourself beyond your means

Cons

• You might miss out on a property that you’ve fallen in love with. 
• Your property could sell faster than you expected and you could be left without a home to move into.
• Time spent waiting for your home to sell can be frustrating, especially if you have any urgent reason to move.

Good advice leads to good decisions

Being unaware of what is happening in the property market means that you are susceptible to making expensive mistakes. When coming to important decisions like this, a professional property team familiar with the St George region can help you in gaining a clear insight as to the best route to take.

Can we help with your St George home?

If you’d like no-obligation expert advice about your St George home, please get in touch with our team. We’re here to help.