A Home Mover’s Dilemma
Should you sell first? Or, find your next home before putting yours on the market?
There is no straightforward answer to this common home mover’s dilemma and much depends on your situation, your finances and how quickly you want to move.
To many would-be home movers, the answer is simpler than it might seem. Most people can’t buy without selling and if you wait until you find your perfect next home, you could easily lose-out. So, if you are serious about moving, you really need to get you property on the market, before you find.
But what if you find a buyer and can’t find? Does that mean you will have to move in to rented?
If you find your dream home, will an owner wait for you to sell? Or, might you have to sell your current property quickly (maybe, for less than you might have achieved) whilst having to pay a premium to beat-off any competition to secure your next home?
If you are thinking of moving in 2021, here’s a summary of a few advantages and disadvantages of selling first or buying first. This is not a comprehensive list and we would be happy to discuss and expand on them
Best Price Best Buyer – Selling first can offer you the best chance of achieving the best price for your current home – As you have not already found where you want to move you are under no pressure to accept offers below market value. You also have time to ensure your property has maximum kerb appeal and that your agent gets great photos and possibly a video tour to show off the features of your current home.
Well-presented property details, with a good video and an effective local, regional and national marketing campaign – not just listing on a few of the popular property websites – can often mean you have a choice of buyers and even someone in reserve, if for any reason your initial sale should falter.
Strong Buying Position – Selling first puts you in a strong buying position, making you an attractive proposition to anyone who is keen to sell. The shorter the chain (people buying and selling) below you the better. The important thing here is ensure that your agent has properly checked-out your buyer’s ability to proceed. A secure sale can often enable you to negotiate a competitive price for next home or at least make a seller look on you more favourably if they have a choice of buyers.
In many instances, having a sale on your own property can make you a “hot buyer” to estate agents. Hot buyers can find they are alerted to properties before buyers who have to sell and are not even on the market with their property.
Making sure the sums add-up – Once you know how much you are getting for your current property, you know how much you can afford to spend on your next home. This can make your property search much easier as well as being in a great proceedable position allowing you to at time have stronger point for negotiating on your purchase.
Possibly missing your “Perfect Dream Home” – If you focus solely on selling your current property before you even start to look, you could miss out on your “perfect dream home”. There’s no perfect answer for any of this but if you’re serious about moving, we strongly advise that you still look while you are trying to sell. You can still offer on a property while your property is for sale but some owners may choose to continue to have their property available until you are able to proceed.
Possible Rising Prices – If prices are rising, you could lose out might be disappointed with the houses that you can afford once you’ve sold. Use the expert market knowledge of your estate agent so you can stay on top of the market and avoid getting priced out.
Possibility of having to Rent – In order to keep your buyer, if you have found or there are delays in buying your next home, on occasion there may be merit in you considering a move into rented accommodation. This is your call, two moves and rent on top can be costly, but often it can also put you in a far stronger position when it comes to making an offer on your next property as you have no dependable sale and therefore pose little risk to the owner you are buying from.
Secure your “Perfect Dream Home” – If you’ve found your “perfect dream home” it can be a good idea to buy first to secure the property, while you have the opportunity. Of course, this would require you either, being able to buy for cash or, secure the necessary borrowings for your next home before selling – e.g. bridging finance, or a “Let to Buy” mortgage.
Less Likelihood of being Gazumped – Or, losing out to another buyer In a “better position” such as cash, no mortgage or no chain.
Protection against Rising House Prices – If house prices are rising, with finances in place you can buy a property at “today’s” price and avoid possibly getting priced out of the market.
Possible lower sale price for your current home – If you buy first, when you come to sell, you may have to accept a lower offer on your existing property than you had budgeted for due to the pressures to move quickly and secure the ‘Dream Home’ you are buying.
An extra mortgage and additional Stamp Duty – Just because you can take out an additional mortgage without selling, doesn’t mean you should. Whilst a “Let to Buy” mortgage may be an option to enable you to rent out your existing home, without professional assistance, it can add the pressure of being a landlord whilst trying to move.
Possible fall in prices – If you have let to buy or expected an amount for the sale of your property and prices fall, this could leave you out of pocket. The property market dictates property prices based on a number of factors out of any estate agents control. Be sure you allow for this in your budgeting.
So here’s is our recommendation for all the reasons we have listed.
Find yourself a buyer FIRST (assuming you need to sell your current property to buy your next).
Do some research or speak to your local agent to get an idea of what your home is worth, also look at the prices of the type of property you want to find – but try not to fall in love with anything before you are ready to move and proceedable.
Moving home is driven with emotion, we are here to help get the logical bit out the way. We hate when our customers miss out on a property they love due to not being able to secure the purchase.
If you need advice please feel free to speak with any of our team, for an idea on the price of your property get in touch or use our handy online tool What is my home worth.
If you have your property on the market or even under offer, we can help you find with our acquisition service.
Happy house hunting.