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Buying or selling: what comes first?

When it comes time to sell your home – maybe you’ve outgrown it, or it has outgrown you – is it better to put your house on the market and then start looking for a new house to buy, or should you be buying a new house and then selling your current house?

Like most things in life, it depends on your situation. Here are three things to think about when deciding whether to buy or sell first.

Unconditional offer

If you sell first, you can (subject to finance) put in an unconditional offer on the property you want to buy. This puts you at an advantage with both the real estate agent and the person selling the house. They know that if you sign an agreement, it will settle – there is no clause waiting for your own house to sell.

Being a ‘cash’ buyer may mean you can negotiate a bit more on the price. Just make sure though that you have got approval from your current lender for an increase in mortgage if needed, or at the least, approval to change the mortgage security.

What’s the housing market like?

Are houses selling quickly or slowly in the area you live, and want to buy in? If houses are selling quickly, then you may be able to go and make an offer before someone else does, knowing that your own house should sell quite quickly.

In a slow sale market, this is a higher risk approach. You may be best to wait until you have an offer on your house, and then start looking for your new home.

Can you afford bridging finance?

Bridging finance in itself is not ‘really high interest rates.’ It is more expensive because you are paying more interest. If you are in a position to do this and have approval for bridging finance, you can make an offer on your new dream home, confident you have the finance to settle, even if your current house hasn’t sold. This is, of course, risky in a slow sales market; you don’t want to be paying extra interest indefinitely.

Selling first gives you peace of mind – you know exactly what your house has sold for, so you know your budget for the next one. However, it does come with the risks of not being able to find somewhere to live before you house settles – meaning you may have to move twice and may also cost you in rent while you find somewhere else. Before buying or selling, think about your own situation, and what is best suited to it.

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