Buying and selling a house at the same time

Last updated: December 2023 | 3 min read

Stepping into the challenge of buying a house? This succinct guide is your ally in a complex market. From handling properties with Japanese knotweed to navigating all-cash purchases, we provide essential insights. Let's embark on this journey together, ensuring you're expertly equipped for every aspect of your property adventure.

1. Why consider buying and selling a house simultaneously?

The appeal and advantages

Buying and selling a house at the same time offers homeowners a seamless transition between properties. By aligning both transactions, you may:

  1. Maximise Financial Efficiency: Consolidating both processes can lead to potential savings. For instance, you might negotiate better deals with estate agents or conveyancing solicitors when you engage them for both buying and selling services.

  2. Reduce Housing Disruption: Avoid the inconvenience of moving into rented accommodation or staying with family between house sales. A simultaneous transaction aims to ensure you vacate your current property and move into your new house with minimal fuss.

  3. Maintain Momentum: Selling your existing property can provide immediate funds for your next house purchase, maintaining financial momentum.

  4. Optimise Mortgage Transition: Transitioning from your existing mortgage to a new mortgage can be smoother when both transactions align, potentially saving you more money in the long run.

  5. Synchronise Property Chains: Aligning your house sale with your house purchase can create a more predictable and manageable property chain, reducing potential delays and complications.

Potential hurdles and risks

While there are distinct advantages, homeowners should also be aware of the potential challenges of buying and selling concurrently:

  1. Coordination Complexity: Achieving the perfect timing for both transactions isn't always straightforward. A delay in one can impact the other, potentially leading to additional costs or complications.

  2. Financial Pressure: Should there be a delay in selling your current home after purchasing your new property, you might find yourself in a position of managing two mortgage payments, even if temporarily.

  3. Dependence on Property Chains: Property chains can break if a buyer or seller further down the chain pulls out. This can impact your ability to proceed with your house purchase or sale.

  4. Increased Stress: Juggling both processes simultaneously can be stressful, especially if unexpected challenges arise. Employing the right professionals, such as a competent conveyancing solicitor and local estate agent, is paramount to navigate potential pitfalls.

  5. Potential for Compromise: You might feel pressured to accept a lower offer on your selling property or pay a higher price for your new house to ensure that both transactions proceed without hitches.

In weighing up the benefits and potential challenges of buying and selling a house at the same time, careful planning, a clear understanding of the property market, and expert advice can help homeowners make informed decisions tailored to their unique circumstances.

2. Starting the process

Get your property valued

Securing an accurate valuation of your property acts as the cornerstone of your selling journey. Start by approaching a few reputable local estate agents. Their insights into current house prices in your area combined with knowledge of the housing market offer a reliable valuation. Remember, the highest valuation doesn't always mean the best sale price; you need a realistic figure that attracts buyers.

Calculate how much equity you have

To determine the equity in your property, subtract the outstanding balance on your existing mortgage from the estimated sale value of your home. Equity gives a snapshot of your financial gain once the sale completes. This figure becomes pivotal when planning the purchase of your next property and for gauging your borrowing power.

Work out your financial standing

A thorough assessment of your finances arms you with the knowledge to embark on both buying a new house and selling your current home confidently.

Factoring in estate agent fees, conveyancing fees, and mortgage arrangement fees

First, calculate the potential costs associated with selling a house. Estate agent fees usually hover around 1% to 3% of the sale price. Add to this, the conveyancing solicitor fees, which can vary based on the complexity of the sale, but often range from £500 to £1,500. Don't overlook the mortgage arrangement fees when securing a new mortgage; these can range from a fixed fee of a few hundred pounds to a percentage of the loan amount.

Remember, by accounting for these fees early on, you ensure a smoother, less stressful selling and buying experience. Always aim to have a buffer in your budget to account for unforeseen costs and to position yourself in a stronger position in the housing market.

3. Engage with professionals

Buying and selling homes involves liaising with multiple professionals. Let's walk through whom you'll need on your team.

Choose the right estate agent

Estate agents are your partners in property sales. They help in:

  • Valuing your home correctly

  • Marketing it to potential buyers

  • Providing guidance on market trends

  • Negotiating on your behalf

The art of selecting local estate agents

Local knowledge counts. When choosing an estate agent:

  • Check their track record in your area

  • Ask about average days on market for homes they've listed

  • Seek reviews or testimonials from past clients

  • Evaluate their marketing strategies

Collaborate with a mortgage broker

Your mortgage broker bridges the gap between you and potential lenders. They:

  • Compare mortgage deals suitable for your needs

  • Offer insights into lending criteria

  • Simplify application processes

  • Provide updates on mortgage rates and offers

Benefits of working with a market mortgage broker

Mortgage brokers come equipped with:

  • Access to exclusive deals not available directly to the public

  • Knowledge of lender preferences, ensuring smoother applications

  • Time-saving advantages, handling paperwork on your behalf

  • Personalised service, tailoring mortgage solutions to your situation

Appoint a conveyancing solicitor

Conveyancing solicitors handle the legal aspects of a property transaction. You'll need one to:

  • Conduct property searches

  • Deal with land registry

  • Transfer funds on completion day

  • Offer legal advice on contracts and other documentation

4. Prepare your property for the market

Getting your home ready for potential buyers takes some groundwork. Here are steps to consider:

Opt for an energy performance certificate (EPC)

An EPC rates the energy efficiency of properties. It's legally required before selling a house in the UK. Prospective buyers use it to:

  • Gauge the property's energy performance

  • Estimate utility costs

  • Consider potential energy-saving improvements

Gather essential documentation

Documentation speeds up the selling process. Ensure you have:

  • Property deeds

  • Guarantees or warranties for home improvements or appliances

  • Relevant building regulations sign-offs

  • Certificates for regular service checks (like boiler servicing)

Tips for making your home more attractive to buyers

First impressions last. To make your home appealing:

  • Declutter spaces, making rooms appear larger

  • Refresh walls with neutral colours for a blank canvas feel

  • Tend to minor repairs, from fixing leaky taps to replacing broken tiles

  • Stage your home, perhaps by rearranging furniture or adding fresh flowers

Understand the property chain

What is a property chain?

A property chain describes the linked sequence of property sales, starting with those who only buy a property, leading up to those who only sell. For instance, if someone sells their home to a buyer who is also selling a house, and that buyer is selling to another buyer who might be a first-time buyer, a chain forms.

This interconnected series of transactions often depends on each sale going through, primarily when buying and selling a house at the same time.

How property chains affect your buying and selling process

Entering a property chain has its set of complexities. Delays in any link of the chain can postpone the entire process, from house hunting to completion date. If one transaction falls through, perhaps due to a failed mortgage application or a last-minute change of heart, it can collapse the entire chain.

As a result, those involved might need to resume their search for property sales or buyers, potentially leading to more waiting and increased costs. Furthermore, the length of the chain can directly influence its stability: longer chains typically pose more risks than shorter ones.

Chain free buyer: What does it mean for you?

A chain free buyer is not reliant on selling a current property to purchase a new one. This independence often speeds up the conveyancing process, eliminating the potential uncertainties and delays of a chain.

For those selling a house, having a chain free buyer can offer peace of mind. It generally means a quicker sale, a stronger position for price negotiations, and reduced chances of the sale falling through. If you’re on the selling end, engaging with chain free buyers might lead you a step closer to securing your dream home with fewer hitches.

6. Mortgage considerations

Discuss with your mortgage lender about transition

Your mortgage lender remains a significant point of contact when buying and selling concurrently. Initiate a dialogue to understand the feasibility of transitioning from your current mortgage to a new one for the next property. Many homeowners make the mistake of overlooking this initial step, leading to unforeseen complications.

In some cases, you might be able to "port" your current mortgage to the new house, a process wherein the terms of your existing mortgage are carried over to your new property. However, this depends on your mortgage lender's terms and the remaining mortgage duration.

Learn about early repayment charge

Selling property often leads to paying off a mortgage earlier than expected. Be aware of early repayment fees, which are charges for paying off your mortgage earlier than the agreed-upon term.

This charge varies depending on your mortgage deal and the remaining period. For instance, fixed-rate mortgages might have higher early repayment charges compared to variable-rate ones. A quick discussion with your mortgage advisor can clarify potential charges and guide you to a more informed decision.

Know the implications of two mortgages

Holding two mortgages concurrently is rare but not impossible. When homeowners find their dream new house before their current property sells, they may consider taking out a second mortgage. While this might appear as a viable solution, it comes with its share of challenges. Mortgage lenders often scrutinise your financial capability more rigorously when you apply for a second mortgage. You'll need to prove that you can afford repayments for both. Furthermore, consider the stress of paying two mortgages if the sale of your current home stalls. A safer approach, for some, might be seeking rented accommodation until your existing home sells.

Ponder on bridging loan as a solution

Bridging loans serve as short-term funding solutions, helping homeowners bridge the financial gap between the sale of their current home and the purchase of the new one. Designed to be quick to arrange, they're typically more expensive than regular mortgages.

If you're considering a bridging loan, evaluate the interest rates and terms meticulously. Additionally, ensure you have a concrete exit strategy, like a clear plan for the sale of your current property or the approval of a long-term mortgage for your new house.

7. Making a strategic move in the market

Decide on the sequence: Buy or sell first?

Benefits of buying first

Buying a new property before letting go of your own home might seem an enticing option. With a new place secured, you have the flexibility to manage the move at your own pace. Plus, there's no fear of being left without a place to live.

However, this route could expose you to temporary double mortgage borrowing, and might push up your conveyancing solicitor fees. Sellers often favour those not part of a house chain, so wearing the hat of a first-time buyer during the purchase can give you an edge.

Advantages of selling first

By selling your property initially, you'll gain a clear picture of your budget for the new purchase. No more guesswork. It also eliminates the risk of paying two mortgages at once.

Although this strategy might mean moving into rental accommodation briefly, it can offer a smoother financial transition. Remember, selling houses comes with uncertainties regarding completion date and asking price. Knowing these specifics beforehand simplifies your next purchase.

Best practices for selling and buying in various market temperatures

Cold market strategies

In a market where buyers are scant, selling your property becomes a tougher task. Patience is key. Set a realistic asking price after thorough research. A standout energy performance certificate could be the detail that attracts a buyer. Collaborate with estate agents who have a track record of sales in slower markets. As a buyer, use the cold market to your advantage. Without the usual rush, take your time visiting multiple properties and negotiate for a purchase price that suits your pocket.

Hot market tactics

A buzzing seller's market often means properties get snatched quickly and often above the asking price. Timing is everything. Keep your house sale documents ready for swift action. Utilise online platforms and multiple estate agents for maximum reach. But remember, while selling might be swift, buying in the same hot market can be challenging.

With properties flying off the shelves, have your finances in order and be ready to act fast. Keep in constant touch with your conveyancing solicitor and ensure they prioritise your deals for quick exchanges.

8. Nailing the deal

How to set a competitive asking price

Estate agents possess insights into local property trends. Seek their advice when determining your property's value. Analyse recent sales of similar properties in your neighbourhood. This research, coupled with estate agent feedback, empowers you to set a competitive asking price, balancing your financial needs and market attractiveness.

Tackle property viewings

Property viewings invite potential buyers into your space. Before each viewing, ensure the property is tidy, well-lit and clutter-free. Consider freshening up spaces with a quick vacuum or light dusting.

During the viewing, highlight your home's features and answer queries promptly. If possible, step out and let the estate agent handle the viewing, giving potential buyers freedom to imagine life in your property.

Making and receiving offers

Receiving offers for your property is an exhilarating experience. Be prepared for potential negotiations. Review each offer thoroughly and consider all factors, not just the purchase price. Some buyers might offer flexibility on the completion date, making the transition smoother.

Conversely, when buying a house, ensure your offer reflects its value, your budget, and the local property market conditions.

Finalise your mortgage and obtain confirmation

Securing a mortgage offer for your new property is pivotal. Liaise with your mortgage broker or lender, providing all required documentation promptly. Upon approval, you'll receive a formal mortgage offer. Store this safely; it's proof of your financial capacity to proceed with the purchase.

9. Towards the finish line

When to exchange contracts

Exchanging contracts solidifies the property transaction. Typically, this step follows once all enquiries are satisfied, and all parties in the chain are ready. The buyer's deposit transfers at this stage. Remember, post-exchange, both buying and selling become legally binding. Any backtracking may result in substantial costs.

Coordinating completion dates for both properties

Setting a mutual completion date when buying and selling simultaneously is no small feat. Communication is key. Engage with your solicitor, estate agent, and the rest of the property chain to pinpoint a feasible date. Aim for a date that provides ample time for logistics but avoids extended overlaps or gaps between the two transactions.

How to manage simultaneous moves

Moving homes is a substantial task, made even more so when selling and buying on the same day. Creating a comprehensive moving checklist ensures nothing gets overlooked. Pack in stages, labelling boxes clearly. This simplifies the unpacking process in your new home.

Working with a removal company

Hiring a reputable removal company eases the moving burden. Get quotes from multiple providers, check reviews and ensure they offer adequate insurance coverage. On moving day, have a clear plan and keep essential items – like kettle, mugs, and tea bags – accessible. A well-organised move ensures you settle into your new property seamlessly.

Celebrate on completion day

Completion day marks the end of your property journey and the beginning of a new chapter. Once the selling price is fully transferred, the property officially changes hands.

Collect keys for your new property, conduct a final meter reading at your old home, and bid it farewell. As you step into your new property, take a moment to relish your achievements.

Common questions answered

What are the tax implications, like capital gains tax and stamp duty?

Stamp duty grabs the attention of many when buying a property. It's a tax you pay when purchasing a residential property or a piece of land in England and Northern Ireland, and the cost depends on the price of the property. First-time buyers might benefit from certain reliefs, so always check the most current stipulations.

On the flip side, selling your home could mean you're liable for capital gains tax. It's the tax on the profit when you sell something that's increased in value. However, if the house you're selling has been your main residence, you might qualify for Private Residence Relief, exempting you from this tax.

How to ensure the exchange and completion happen on the same day?

Exchange contracts signify the point where the sale becomes legally binding. Traditionally, there's a gap between the exchange and completion to allow both parties to prepare for their move. However, they can happen on the same day, although it's less common. To ensure this, communication is your best friend. Work closely with your conveyancing solicitor and the buyer or seller to synchronise the dates. Ensure you're ready to move out promptly and that all parties have their finances in order.

How to handle property search while selling your current home?

Selling your home whilst on the hunt for a new one can feel like a juggling act. To make it smoother, begin your property search early and be clear about your must-haves. Engage with estate agents who can present tailored options. While you're getting your property valued and preparing it for sale, visit potential houses. Schedule viewings during times your home is being shown to prospective buyers, maximising efficiency.

Are chain free properties a better option?

A chain free property means there's no onward chain – the seller isn't dependent on buying another property. This can expedite the buying process. When you're trying to synchronise buying and selling, a chain free property could remove some potential hold-ups, ensuring a more straightforward transaction. However, every situation has its nuances, so assess what's right for your circumstances.

How to deal with housing market fluctuations?

The housing market has its highs and lows. When both buying and selling, keep an ear to the ground regarding market trends. Seek advice from estate agents and property experts who can offer insights.

In a buyer's market, you might find a bargain but could struggle to sell your property for your desired price. In contrast, a seller's market could mean a swift sale, but buying might be pricier. Being flexible and responsive to the market's ebbs and flows can help in making informed decisions.

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