Author: Jawitz Properties
19 November 2020
To buy first or sell first – that is the question
When you’re selling your home with a view to buying a new one, it can be tough to know where to start. Do you sell your current home first, or focus first on finding the new home of your dreams? There are pros and cons to each approach, and the right answer for every family will be different. While your Jawitz #RealPartner will be there to help you every step of the way, here’s what you need to know.
Option 1: Sell first and then buy
The reality is that very few people have the financial wherewithal to buy a new property without having sold their former home. This means that for most buyers, selling first is the simplest option. Depending on how quickly your buyer wants to move into his or her new home, you may be able to negotiate continuing to live in your former home for a time while you look for a new home, paying the new owner occupational rent.
If this is not possible, you could consider a short-term rental or, if possible, staying with family members while you find the new home that’s right for you. In this case, you may also need to factor in the cost of storage facilities and of transporting your possessions twice – once from your former home to the storage facility, and then from the storage facility to the new home of your dreams.
Once you have reached the stage of being a buyer rather than a seller, it’s important that you don’t rush the process of finding a new home based on the desire to get out of a state of limbo. Have a clear idea in your mind of what you are looking for, and avoid settling for anything less.
Option 2: Buy first and then sell
The other option is to start by finding the home of your dreams and putting in an offer to purchase with a suspensive condition stating that your offer only becomes valid once you have found a buyer for your current home. This can lead to a nail-biting time for you as a property buyer, because the seller can also include a clause in the contract which states that if they receive any other offers on the property while you are trying to sell, they can accept these offers. A suspensive clause will have a time limit on it (typically 60 days), so a buyer choosing this route needs to have had their property valued before signing on the dotted line, and be ready to let a Jawitz #RealPartner work their magic and sell your home as quickly as possible.
The ins and outs of bridging finance
Another option is to apply for bridging finance which, as the name implies, bridges the financial gap for the period between the sale of a property and the completion of the transfer process. This type of finance comes with an array of fees, terms and conditions, so ensure that you have read the fine print closely before you sign on the dotted line. In a nutshell, bridging finance is a type of short-term loan only available to people currently undertaking a real estate transaction. It may provide the assistance you need to cover the deposit or transfer fees on the property you are buying. You will need to pay back your bridging loan as soon as the sale of your original property is finalised. This type of loan is not processed by banks or bond originators, and will be based on the equity in your property as well as your credit record.
The first step in any property transaction, whether you are buying, selling or both, is to find a realtor you can trust. Your Jawitz #RealPartner will guide and advise you through every step, making the process seem far less daunting and far more enjoyable. Contact us for more information.
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