In the previous post, you’ve learned that the three main drivers of decision-making when it comes to buying or selling first are risk tolerance, supply and demand, and the property market cycle. You now have, more or less, an idea about what to do next. If you already have formed a decision, evaluate it first. Let’s take a look at the pros and cons of buying or selling first.
Selling First before Buying
Generally, there’s a 60, up to a 90-day settlement date for the sale of your property. However, you can determine settlement requirements and flexibility can be used as a lever in your negotiation.
Deadlines matter, if you intend to use the money to settle the balance of your new home, you may have pressure to sell before a certain date.
Selling a property first focuses you on the selling aspect alone. You won’t have to go through the psychological and mental process involving buyers trying to cash in on your need to sell!
If you’re too picky, under-offer, or if you miss out on the properties that you want, it may take longer for you to buy. As a result, if you sold your property too soon, you may need to rent temporarily.
Property markets do change. As a consequence, you may encounter buying prices as a challenge. You may end up considering bridging finance just so you can secure a new home.
After selling, your options are automatically limited by the properties that are currently for sale in the market. If you have a target location in mind, your options get narrower. You would have to settle for what’s available. Remember a buyers agent can be fantastic for you to be working for you in the background – and be ready to go.
Buying first before Selling
You’ll have more time to search for your dream home when you decide to buy first. If you’re rightsizing.
If the property market is cool, you can potentially save money by buying a property for less than its competitive price.
You may have more flexibility to negotiate based on the likelihood of your existing property getting sold. That means that you can arrange for certain conditions in view of your existing property’s performance and value in the current market.
Bridging finance may pose a challenge. It can add to your financial obligations and your nerves. Until your old property gets sold, you’re in charge of managing it.
If you present a conditional offer to buy based on the time when your old property gets sold, vendors may not want that. From the seller’s perspective, property prices may rise further or may simply fall, and time on market is very important.
If you really want a specific property but you’re still waiting for your old property to get sold, you may want to offer the vendor something more so that your stake in the new property is maintained. That’s an additional cost and/or effort for you.
Your agent will need to assist with skilled negotiation
There may never be a right time. It’s right when it is right for you. But whether you’re selling or buying first, you need to prepare upfront. Before you do anything, go through the presentation work in our online course – Adding Value to your Family Home, and prepare your house for sale a good six months prior to going on the market. That way, you’re free to look, buy, or sell whenever you want. It puts you in the driver’s seat.
You can get more insights also when you read my book, Rightsize Your Home: The Empty Nester’s Guide to a Stress-Free Downsize.