Simultaneous buying and selling (without pulling your hair out) is a tricky balancing act, made even trickier by fluctuating market conditions. Yet, as countless homeowners could testify, it can be done successfully, with a few little tips and tricks. But, to understand how to buy and sell property at the exact right time, first you need to have a clear understanding of the process.
What comes first; buying or selling? Well, there is no one-size-fits-all approach. Whether you buy first or sell first depends on a number of factors, such as your budget, your financial situation, where you’re buying (or selling), and the market conditions at the time.
So, without further ado, here’s how to buy and sell property, all in perfect timing! Read on to get our top tips on how to get the timing right so you’re not out of pocket when the dust has settled in your new property.
1. Assess Your Situation
First up, you need to have a rock-solid understanding of your personal situation before you make any decisions. Consult professional advice if needed; speak to an agent, your bank, a trusted broker, or just research the market as much as you can.
You’ll need to understand:
- What your current property is worth
- What you’re looking to buy, and what buyers are paying for similar properties
- The current (and future) state of the market
- Whether or not interest rates are likely to change
- What your financial situation is like, including whether or not you’ll be able to get a bridging loan if necessary
- Any purchasing costs and selling costs involved with these transactions
2. Consider All Your Options
When you’re thinking about how to buy and sell property around the same time, many homeowners don’t realise just how many options are available to them. You could choose any one of the following courses of action:
- Selling your property first; which is a great option if you’re worried about the amount of time it may take to sell your property
- Buying a new property first; which may be a good option if you feel it may take time to find the right property, however, you need to have enough equity and an income that is significant enough to hold both properties at once
- Simultaneous settlement; an ideal option, yet it can be exceptionally difficult to orchestrate
- A bridging loan; which is the perfect option for those who have enough equity but don’t have the means to cover the balance for a new home while they’re waiting for their existing settlement to be processed
3. Sell First or Buy First?
There are pros and cons with both selling first or buying first, but the right choice is highly personal. If you sell first, it means you’ll know exactly what you have to spend but if you wait too long the market could increase, particularly in Sydney! This means that by the time you find something you actually want to buy, you may not be able to afford it. If you’re fairly flexible on where you want to live or there’s plenty of stock available, this could be the option for you.
If you buy first, however, you run the risk of paying two mortgages, while you wait for a buyer for your own home. This isn’t always the worst thing, though. If you can afford it, you could even rent out either property in the interim and wait until the market picks up.
4. Tips for Selling First
If you decide to sell first, you could float your property off-market first, just to see how much interest there is and what you could get it for. If you communicate with your agent you can also try to marry up the buying and selling process. Your agent may be able to negotiate the settlement times according to what is best for you. A good agent will be able to help negotiate a long settlement for you, which gives you time to buy a new home.
If you’re selling first, you can also rent for a short period of time or, if you’re a single, couple, or small family, live with friends or family. The worst thing you could do is rush into buying a property that you don’t love, especially if you’ll be living there!
5. Tips for Buying First
In a rising market like Sydney currently is, experts recommend that you buy first and sell later, just in case property prices increase and you get priced out of the areas you want to buy in. This also means you can take your sweet time in finding your dream home.
If you’re buying first, however, you may want to look into a bridging loan. This can help pay for any costs that need to be covered in between buying and selling.
Again, this is where having a fantastic local real estate can help you immeasurably. They’ll be able to help you sell your home quickly after buying, and they’ll give you the most accurate estimate of what your property is worth – this is crucial when you buy first.
If you’re still unsure about to how to buy and sell property simultaneously, contact us contact us for information. These decisions are highly personal, and you need to do what is right for you, whatever that may be! The more informed you are, the better.