Ask the expert: should you buy before you sell?
by Housesimple on 4th April 2016
When it comes to selling your home, one important consideration you may have is whether to buy first or sell first. Here we weigh up the potential risks and rewards of both options to help you reach the right decision for you.
- With cash in the bank from your home sale, you’re likely to be favoured over buyers in a chain. This also puts you in a strong position when it comes to negotiating the price.
- You can afford to wait to secure the highest sale price for your home.
- You know exactly how much capital you have before making an offer, allowing you to have a more focussed and efficient property search.
- Unless you can bunk up with family or friends, some of the cash from your sale will have to cover the costs of temporary accommodation and storage.
- You may end up compromising on the purchase of your next home to avoid ongoing rental costs or rising property prices.
Top tips: Selling before buying is typically best for those who are downsizing, as these buyers tend to have capital to spare for renting temporary accommodation and other interim costs. It’s also a better position to be in in a market where property prices are falling.
Buying before selling
- Buying before selling gives you time to search for the right home without the pressure of a waiting buyer.
- With your next home already purchased, you can avoid the inconvenience and costs of an interim move.
- By entering a property chain, it allows you to be certain of all of your costs upfront.
- Without a buyer at the ready, sellers may demand a higher asking price.
- You stand a higher chance of being gazumped (when your accepted offer is then rejected for a higher offer from another buyer) than buyers with cash in the bank.
- Chains can take time to come together, meaning this isn’t the best option if your move is time sensitive.
Top tips: Buying before selling is a good decision if the wish list for your next property is very specific. What’s more, getting your mortgage pre-approved will put you in a more favourable buying position.
Ultimately, your best course of action will depend on your individual circumstances, as well as the state of the market. Keeping a close eye on market trends and assessing your priorities will be key to making the decision that’s right for you.