Should you sell your existing home before you move into a new one?
You need first to consider the situation of the market. Is it a buyers’ market or a sellers’? In a buyers’ market the prices will be low and properties will usually be on the market longer. You will have some time to look for a new property. You may want to align the sale of your existing home with the purchase of your new one.
In a sellers’ market, there aren’t a great many houses on sale. Your house could sell quickly. You could have to resort to temporary housing till you purchase your desired property.
Selling your existing home first
If you want to sell you existing home first, and then look for your next home here’s what you should know:
What are the advantages if you sell first?
- You will know exactly how much money you have for purchasing your next home
- You may not have to worry about taking a mortgage
- You can work out the finances for purchasing your new home without being under any pressure.
- You can take your time to sell your home to find the best price
- Since you can be in a stronger position if you have cash in hand, the seller of your next home is likely to accept your offer. This is how you can avoid getting gazumped.
- When purchasing your new house, your offer will not contingent on the sale of your existing property. This will make your offer more attractive to the seller.
- You will not have to pay additional stamp duty is your new home is the only property you own.
What are the disadvantages if you sell first?
- If you wait to sell your home first and come across your dream home, there is an off chance you may miss out on it.
- You may also have be faced with a situation where you would have to move twice if you end up selling your existing home before you have finalized the deal on purchasing your new home. This will not only be an inconvenience but also increase cost.
- You may have sold your house for a good price but have not decided on where you want to live next. In this case you would have to rent which can prove costly.
- If you stay in temporary housing for too long, the property prices will probably increase. So you may have to think about additional sources to finance the expense of purchasing a new home.
Buying your next home first
If you are adamant on buying your next home first and then worry about the sale of your previous home, you should be aware of the following:
What are the advantages if you buy your next home first?
- If you have come across your desired home and do not want to risk it being sold, you could move on it first to secure your dream home.
- You will not have to move twice, which is always a possibility if you sell your existing home first before you purchase your next home.
What are the disadvantages if you buy your next home first?
- If the mortgage on your existing home is not completely paid off, you will have to secure another mortgage to finance purchasing your next home.
- When you have moved into your next home, you will have 3 years to sell the previous one if you want exemption from paying stamp duty. This means that time will not be on your side when you go off selling your previous home which. This will increase the pressure on you to sell.
- You may be risking a downfall in the property market. You previous home could drop in value.
Buying your next home and selling the previous one at the same time.
If you feel that you want to move into your next home at the same time you sell the previous one, our article on this subject will equip you with all the necessary information you need to make this decision.
When wanting to move homes, an important decision to make is what you will do with the existing one. You could want to sell your existing home first before buying a new one. Conversely, you could want to buy your next home first and then worry about selling the previous one. If neither of the foregoing is an option for you, you should consider buying your next home and selling the previous one at the same time.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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