Time for a new home

Consider timing between buying and selling

Buy first and sell later, or maybe sell first and then buy? Or what about buying and selling at the same time? What are your options when trading up or downsizing your home?

When it comes to the ideal order in which to buy and sell a property, there’s no one-size-fits-all answer.

Your personal circumstances are unique and will help determine the right answer for you, but if you're not sure, let’s run through some options.

Buy First

If you find the house you want, but already own a property, it’s common to include a condition to the sale and purchase agreement that your purchase of the new home will occur after the sale of your current one.

This condition gives you time to sell your home without being legally obligated to purchase until yours sells.

Keep in mind that most terms in a sale and purchase agreement are bound deadlines for completion, so you’ll need to stipulate a timeframe in which your home will be sold. If you haven’t sold it by then, the clause allows you to pull out of the sale.

A disadvantage of including this condition in an offer is that if the vendor of the property you want has multiple offers on the table and others are not contingent on selling a property first, they may be more attractive.

Assuming all other details are comparable though, you could strengthen your offer by offering a higher purchase price.

Sell First

Selling your home before looking for another one is a good option for those who prefer to take on less risk.

The main benefit of this approach is that you know exactly how much money you have from the sale of your home for your new house-hunting budget. Sellers also prefer unconditional cash offers, so being able to offer them a price without it being contingent on the sale of another property could put you ahead of the competition.

Keep in mind that you may need to find and rent temporary housing if you haven't found a new house by the time your property sale closes. Setting a long settlement date on your current property to give yourself enough time to find your next house is one way to avoid this.

Buy and sell at the same time

If you want to try the double act of selling your home and looking for a new one at the same time, bridging finance might just be your new best friend.

Bridging finance, often known as a bridging loan, is a short-term housing loan that spans the gap in timing between buying a new home and selling your current one.

It allows you to avoid the rental costs you may incur in the ‘sell first’ scenario, but as the rate for a bridging loan is higher than a home loan rate, you want to make sure you’re not carrying this cost for too long.


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