To Sell Or Buy First
One of the biggest dilemmas eventually faced by home owners is whether it's best to sell first and buyer later or visa versa. Both have pros and cons and, in the end, it depends upon the individual's financial situation, coupled with the state of the property market, will determine which method is best.
At this point it should be said that it is possible to sell and buy at roughly the same time so you move out of your current home and into your new residence on the same day. This is the ideal and, in most instances, is exactly what happens. When this doesn't happen, it's reassuring to know that there are alternatives available.
Sell First
One of the main benefits of sel lin g before you buy is the reassurance of knowing exactly what you've got to spend on your next purchase. The sense of urgency is also removed so there is less pressure to accept the first offer that comes along.
Sel lin g first is usually the option chosen by people who have a considerable mortgage on their current residence thus the expense of two mortgages is something they want to avoid.
The risk, of course, is if your current residence sells and you haven't found a suitable property to purchase. What do you do in the meantime?
>> Negotiate a long settlement. The average settlement time (from exchange of contracts to the day the new owner can take possession) is 6-8 weeks. If required, this date can be extended thus giving you more time to search for your new home.
>> Rent your home. If the buyer doesn't want to move into the property at settlement then there is the option to rent it from the new owner.
>> Short term rental accommodation. Of course long term rental accommodation is always an option but if you don't want to be tied into a six month lease then look at corporate and holiday rentals. These can be rented on a week-by-week basis and out of peak season can be very cost effective. House sitting shouldn't be ruled out either.
>> Register your interest with all real estate agents in the areas that interest you. Tell them that you have already sold and are interesting in knowing about properties as soon as they come onto the market. Agents will be very interested because you are a "cashed up" buyer.
Typically there are more properties on the market for sale during Spring. This will give you more choice and you may have more chance of finding a suitable home.
Buy First
Many people who find themselves in this situation have found their dream home by surprise. Sometimes it's a bargain that is too good to pass up or the property is in a tightly held area where homes rarely come up for sale. Whatever the case, this usually leads to a sense of urgency from the owner to sell their current residence. If you are thinking of moving and have started looking at properties without listing your own for sale, there are a few things you can do to prepare in case you find your dream home and want to sell quickly.
>> Ready your home for sale before you even start looking at homes to buy. Meet with your legal representative and have them prepare the Contract For Sale.
>> Try to negotiate a long settlement on your new purchase thus giving you ample time to sell your existing home. Once you list your home for sale, let the agent know that you want a settlement period that coincides with the settlement date of the new property.
>> Ask local real estate agents what they think your home will sell for and how long it is likely to take. This way you will be info rmed and prepared.
>> Don't let buyers know you are committed elsewhere as they may interpret this as desperation and submit below par offers.
>> If you are organised and prepared, the agent will be able to list your property quickly and can have it on the internet within a couple of days. Within a week or so the rest of the advertising should be complete.
>> Finally, speak frankly and openly with your real estate agent. Inform them of your situation so they can create a suitable marketing campaign and educate potential buyers accordingly.
It is also important to watch market fluctuations. These can work for or against you. If you sell in a downturn and hold off buying when the market starts to pick up then you are likely to experience a financial deficit. Conversely, if you sell at the peak of the market and buy when the market has fallen you can be significantly ahead. Ideally, if you are not an expert at forecasting real estate market fluctuations it's safest to sell and buy in the same market conditions.