Should I Sell My House Before Buying a New One?
Category Advice
Can't stop fantasising about your next home but also can't decide whether to sell your current property before starting the house-hunting process? Is it okay to jump the gun and snag that dream property before you've handed over the keys to your current home?
Before you make any decisions, you need to understand the market conditions and consider your financial situation.
How You Know Whether to Buy or Sell First
First things first - you need to research the current property market. Is there an advantage with sellers or buyers? This is important to know as it indicates whether your current property will sit on the market for a while, or whether you'll likely sell your home quickly, but then struggle to find a new one.
Both options have their benefits and drawbacks, and it all boils down to timing and your personal options when it comes to taking financial risks. Here's when you can consider each option:
When you should sell first
This is the option most homeowners find works for them, as it's generally the safest play.
Financially, it makes more sense to sell first as you'll have more than just an idea of what your budget for a new home will be, after all the repair costs and fees that go along with selling your property. On top of having a clear budget for your new home, you can use the income from your sale to place a significant downpayment on the property.
Besides the financial benefits of selling first, you can count on the fact that there is no rush to find a buyer, as you can guarantee that you won't be stuck with two mortgages at the end of the day. Take your time to find the best offer on your home.
When it's okay to buy first
Although it's not likely you will find financial benefit to buying a new home before selling your current one, there are other reasons why this could be the best move for your specific circumstance.
If you happen to come across your absolute dream home that you're just not willing to risk leaving for another buyer to snatch up, and you are in the financial position to do so, it may be in your best interest to purchase it without waiting for your current home to sell. This means that you'll be sitting with two mortgages to pay off until you're able to sell your old one. You also have the option to make use of a bridge loan - this will only be available to you if a loaner agrees that you have a strong credit score and debt-to-income ratio.
Buying a house before selling will also guarantee you won't have to move twice from an interim property to your new forever home.
Do you need a bit more advice when it comes to buying and selling your property? Contact SAproperty.com today to chat with one of our experienced property specialists!
Author: SAproperty.com
