Buy or Sell First?
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Buy or Sell First:
Laying out The Pluses and Minuses to the Moving Process to Help You Decide What’s Right For You
Once you’ve made the decision to move, there is still one very pressing question ahead of you – Do you buy first or sell first? Although there are a lot of benefits to selling first and then buying, doing so brings up the question – Where do I live if my home sells before I buy my new home?
You are not alone in this situation. This is a common question for many Wembley Downs Home Sellers. Understand that there are options you can use to help you make the right decision. Here we will reveal to you the pluses and minuses of each method, giving you the ability to see what your options are. The more you read, the more confident you can be in your home selling approach.
Pluses and Minuses
- Pluses of Buying First
- You have the certainty of having a place to go home to at the end of your move.
- Your furniture moves from one house to the other – just once – so there is no storage necessary.
- Minuses of Buying First
- There is the added pressure to sell your existing home quickly. You may end up selling for less in an effort just to get it off the market.
- If your home is not sold in time, you must find another source of funding for the new home such as a higher interest rate Bridging loan, costing you more money.
- Pluses of Selling First
- You can comfortably buy your new home with a subject to finance or a cash offer, rather than with a “subject to sale” cause, putting a stronger offer on the table.
- You won’t over-commit on your new home purchase. You now know how much you can afford with the proceeds from the sale of your previous home.
- Minuses of Selling First
- You will temporarily not have a place to call “home” and be uncomfortable with the feeling of uncertainty of where you are moving to.
- With the added pressure of finding a home, you may settle on a home that doesn’t meet all of your needs.
- You may have to invest money and time in finding temporary housing and storage and incur the cost of moving twice.
When you are ready to buy or sell your Wembley Downs home, contact a Wembley Downs Real Estate Agent to help you answer questions about your specific situation and find what option works best for you.
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The Hybrid Method
You may not realize this, but there is a third option when it comes to the process of selling your Wembley Downs home.
The idea here is to find a good Wembley Downs Real Estate Agent to work with, who will help you search for your new home, and once found, will help you buy it. Your agent should have everything prepared to sell your current home so as soon as you’ve found your new home, your agent will immediately put your home on the market. As a result, your home sells earlier, saving you money and stress.
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Bridging Finance
When you choose to “Buy First” you may need a loan to cover you for the time you own the two properties. Taking out a Bridging Loan is the best option if your new home sale settles before your existing home purchase settles.
There are different methods of arranging bridging finance.
- Scenario 1: You could choose to have both properties as security, resulting in one loan. This results in a 6-12 month bridging period during which you will make repayments according to your lender’s requirements. Repayments are not necessarily required during this period, but they are highly encouraged to minimize the overall debt.
- Scenario 2: The loan is only taken out on the new property and you keep the mortgage on your current home. Your existing home is used as security for the new property as well. This gives you an extended period of 12 months, rather than 6, to repay the loan. If you choose this method, you must make repayments on both properties for this whole period. As soon as your old home is sold, the original loan is paid first and the remaining funds go towards reducing the new mortgage.
- Pluses of Bridging Finance
- A financial lifeline to help you settle the sale a new home before settling the sale of your old home
- Provide certainty in a more secure feeling about where you’re moving to
- For many people bridging finance can be at the same interest rate as normal home loan financing.
- Minuses of Bridging Finance
- They tend to have a short term of 6 to 12 months
- Bridging finance comes with other risks such as not selling your home for what you expected.
If you think that Bridging Finance could work for you, our Wembley Downs Real Estate Experts can provide you with a Finance Broker Referral List. Simply fill out the form below to receive the list – free of charge.
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Short Term Furnished Rentals/Storage
If you do find yourself in between homes, your best bet is to put your furniture in storage either by the furniture removal company at the premises or in self storage facilities. Then find some short term furnished apartments staying in the interim. It may not be an ideal situation, but the most important thing to realize is that you do have options. Don’t get caught up in the “homeless” mindset – feeling as though you have nowhere to go. The best thing you can do is find a good Wembley Downs Real Estate Agent who will help you get through this difficult process. If you have any questions about whether to buy first, sell first, or use the hybrid method, please contact one of our Wembley Downs Real Estate Expert Today!
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