Buying and selling houses can be tricky, particularly if you are selling and buying a home at the same time. Should you buy a new property first, or sell your current home before purchasing a new one? It’s an age-old conundrum.
We take a look at the pros and cons in the light of the current Australian housing market, to help you make the right decision.
How to buy a new house in the current housing market
It is currently a buyer’s market in Australia, as housing prices are going through what’s known as a correction. Prices have fallen by between 10 and 20 percent recently, particularly in the major cities including Sydney and Melbourne. This means there are plenty of bargains to be had, provided you have the necessary equity.
For this reason, in the current climate, buying a house before selling your own doesn’t make sense. Once you have released the equity from your current property, you can keep your eye out for a property you love and you might be able to grab it at a bargain price. However, the process you choose will depend entirely on your circumstances.
Can I buy another house before I sell mine?
Technically, there’s absolutely nothing to stop you doing so if you can afford it. Buying a new home before selling your current one does have a couple of advantages:
However, these elements tend to be outweighed by the advantages of selling your current home before you buy a new one:
If you sell your current property first, you have time to make it look as attractive as possible so it will gain a higher sale price. You can also take time to consider offers and negotiate with buyers until you get the results you want.
If you have already bought a new property, you might be desperate for the money, as you could be paying two mortgages at once, or have a bridging loan. This could tempt you to sell your current property for less than it is worth for a quick sale.
Selling your current property first lets you know exactly what you can afford when it comes to purchasing a new property. It prevents you from getting into financial difficulties through overestimating the value of your current property, then not achieving the sale price you wanted.
If you buy a new property before you sell yours, you will not only have to pay two mortgages and two sets of bills, you will also be responsible for the upkeep and maintenance of two properties. This can take up a considerable amount of your time when you should be settling into your new home.
Ideally, you need to find a new home as quickly as possible after selling your current one. However, it doesn’t mean you need to end up staying with relatives! You can always extend the settlement period on your current property to give you more time to find a new property you love.
Find out more about how to buy a house while selling your own
One of the most important things to do when buying or selling a house is to find an experienced and reputable real estate agent who will be able to make the process as smooth as possible for you. If you would like more information about buying and selling houses, or want to know how to build a house before selling yours, please contact us, and we will be happy to help.