Buy Or Sell First?
Selling a home and buying another at the same time may seem daunting, but it can be done. The secret is to be prepared.
Jarrod McCabe, an independent buyer’s agent in Melbourne, says the key to successful simultaneous property transactions, which are popular in spring, is research and preparation.
“The conventional wisdom is that it’s safer to sell a home first, then buy another, as it reduces your risk and means you don’t have to scramble to get bridging finance, but it’s possible to do both at the same time, or even buy before you sell, but it all comes down to research,” McCabe says.
The most important consideration is the market, he says.
“As with everything to do with property, it all depends on market conditions. You need to do your research to understand what’s happening in the market, what the competition looks like, what the property you’re selling is realistically worth and so on,” he says.
Vendors who go down the conventional road of selling first, can buy another home before settlement by accessing bridging finance, McCabe says.
“It’s all about being prepared.”
“Before you begin any property process, you need to have a detailed discussion with your banking institution and have your finances sorted. It depends on your situation, but bridging finance can be an option for many people. You just need to be organised. I believe more people are prepared to look at this option nowadays, especially with interest rates at record lows,” McCabe says.
Buy or sell first?
In a rising market, it’s worth considering buying first and selling second, he says.
“This is especially true if you’re upsizing and it can save you thousands. If the property you’re selling is desirable and will have a high level of demand, there’s no reason you can’t look to buy first. It is a little unusual, but I have seen it done,” McCabe says.
When it comes to selling in spring, McCabe says the sooner the better.
He says vendors who sell in the early part of spring – before the AFL grand final in the Melbourne market – can capitalise on pent-up demand and a peak in prices off the back of the quiet winter period.
“Those who sell early have the rest of spring and early summer to find a property, during a period of strong supply, before clearance rates level off. It’s possible to have sold, bought and moved into a new property – all before Christmas,” he says.
“It’s all about research and being prepared. Know what your current property is worth, do the sums with your financier, know what you want to buy and what you’ll be prepared to be pay for it … and be smart.”
Thank you to Real Estate.com for Providing this interesting article.