If you're looking to make a move in real estate and you're not sure what strategy you should approach for buying a new home and selling your current one with, you need to take into consideration current market conditions and your situation. A lot of people who start looking at a new property aren't sure whether to sell first and then move or to buy now and put their own home on the market later.
Read on for a few suggestions to help you make the best decision for you.
Buying first in a seller's market
In a seller's market where real estate is hotly contested and you're likely to end up in a bidding war over a property, buying first can ensure that you end up with the home that you want. Ideally you're looking to get yourself in a position where you can sell quickly too, taking advantage of the current market before it swings back the other way.
The main concern is that you end up making mortgage payments on two properties at the same time. While you should be able to use the equity in your home to secure a swing or bridging loan, it will take a toll on your income to buy first rather than sell.
Renting the old home
Turning your home into a rental after you buy is another option. You'll secure more income and have an easier time keeping up with payments with the ability to sell at a later date that is more suitable. Renting gives you the choice to buy the property that you want, when you want, but you might run into problems when it comes to finding a 'temporary' tenant.
Selling first
Selling first gives you more money to work with and can give you a better idea of your price range. It does make timing a lot more difficult if you have to vacate the premises and find a new property within a given time after you settle, but you can make selling your home first easier by negotiating a longer closing period. If you have friends, family or other accommodation that you can take advantage of however, selling first gives you a lot more freedom when it comes to making another purchase and you won't run the risk of bleeding money trying to hold it all together.
There are a number of ways to approach the sale of your home and purchase of a new one. Talk to your real estate agent about their thoughts and make sure you sit down with your bank manager to get your situation straight before you start making offers.
Read on for a few suggestions to help you make the best decision for you.
Buying first in a seller's market
In a seller's market where real estate is hotly contested and you're likely to end up in a bidding war over a property, buying first can ensure that you end up with the home that you want. Ideally you're looking to get yourself in a position where you can sell quickly too, taking advantage of the current market before it swings back the other way.
The main concern is that you end up making mortgage payments on two properties at the same time. While you should be able to use the equity in your home to secure a swing or bridging loan, it will take a toll on your income to buy first rather than sell.
Renting the old home
Turning your home into a rental after you buy is another option. You'll secure more income and have an easier time keeping up with payments with the ability to sell at a later date that is more suitable. Renting gives you the choice to buy the property that you want, when you want, but you might run into problems when it comes to finding a 'temporary' tenant.
Selling first
Selling first gives you more money to work with and can give you a better idea of your price range. It does make timing a lot more difficult if you have to vacate the premises and find a new property within a given time after you settle, but you can make selling your home first easier by negotiating a longer closing period. If you have friends, family or other accommodation that you can take advantage of however, selling first gives you a lot more freedom when it comes to making another purchase and you won't run the risk of bleeding money trying to hold it all together.
There are a number of ways to approach the sale of your home and purchase of a new one. Talk to your real estate agent about their thoughts and make sure you sit down with your bank manager to get your situation straight before you start making offers.