Selling and buying- things to consider
A common scenario encountered is people selling their current home and buying another. Three main reasons are ;
- Buy a home more suited to current needs. Could be a bigger home as the family is growing, or downsizing
- Buy a better quality home
- Move to a better location
Often it’s all three.
A common question is ‘should I sell before I buy?’
My initial response is Yes.
Five good reasons to sell before you buy;
- The money is available from your sale to cover the costs of buying again
- Avoid bridging finance
- A ‘subject to sale’ clause is not required in a purchase contract, improving your bargaining position
- You may get a better price for your home as you aren’t under any time pressure to sell
- You are in control of the process, not the other way round
Selling before you buy doesn’t mean you have to wait until your home has settled and the money is in the bank. Once your contract for sale has reached the unconditional stage when it is no longer subject to finance, building inspections etc, you can consider making offers on a property to buy. Always make sure the settlement date of the property you are buying is on or after the settlement date of the property you are selling.
It can be tempting to buy before you sell. You see your dream home and want to buy it. This can be done, but it’s a higher risk strategy. You can use bridging finance( for more information go to https://halogenhomeloans.com.au/bridging-finance) if available. Or, you may have the financial capability to support two loans for a short time. The choice is dependent on the persons circumstances.
Plan ahead and understand the process and risks involved. It can save a lot of heart ache and panic.
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