Should I sell before I buy?
Selling first may, after those considerations, sound like the best option. Of course, selling first gives you plenty of time to consider your price, negotiate with buyers and be flexible with when you sell and which of your offers you accept.
It also means you will only be stuck with one mortgage at a time and will not face hardship as a result of financially biting off more than you can chew. You’ll also potentially be more likely to achieve your next mortgage without the cash flow drain.
If you do not find a home soon after agreeing to sale, then you will face the realities of renting. Or worse yet, living with relatives or friends! While this works for some, the outlay in rent and storage, the potential inconvenience of not being in your own home and sometimes the difficulties in finding temporary rental accommodation can make the situation unrealistic. Effectively, you’re in limbo until you buy. This may not be something everyone is willing to tolerate – particularly those with pets and children or who need a solid home base (for instance, if you work from home).
This may see you rush your purchase as a result; potentially leading you to buy a home that isn’t quite right for you or for a price that you would have preferred to negotiate. It’s worth considering how much you can handle before you start rushing the process and scrimping on research and due diligence to buy. Sometimes it takes a while for the right property for you to come on to the market.
Weak markets may assist in bringing prices down in the meantime, allowing you to buy in sooner. However, on the flip side you may also find that hot markets will see prices swing upwards. You may not be able to afford the home on the other end of market growth if you stay out of the market for too long, and have missed out on capital growth that you could have achieved while holding onto your existing home.
Many buyers and sellers do try to sell their moves closely to the time of the other contract going through. Given these pros and cons, it’s understandable. In order to determine the best outcome for yourself it is worth knowing your personal and financial circumstances well and discussing ahead of time with other involved family members or investment partners. No choice is necessarily wrong when it is made in full consideration of the available facts.
