Whether you’re looking to downsize, expand your family home, or move to a new area, knowing how to handle the house moving process can be tough. Almost everyone knows at least one person who faced endless nightmares when moving, while the other half of movers swear by certain processes and tips to keep the move as smooth as possible.
But one of the biggest questions facing movers is this – should I sell first or buy first?
A lot of this depends on your timescales, budgets, and commitments. Keep reading to uncover the pros and cons for both, wrapped up with our takeaway of tips and recommendations.
Should you buy before selling?
When you buy before selling, you commit to your new home before selling your current home.
Advantages
First thing’s first, buying before selling is only possible when you have the funding for your purchase without the money you will get from your current property sale. This is generally the best option for those who have enough money to hold both properties at the same time for a period of time, or who want to keep their current property as a rental investment – continuing to earn through rental income during the move and beyond.
Other advantages include:
- Due to the fact that you will still have your current property throughout the entire buying process, the entire process becomes less stressful. Why? Because you are never without a place to call home, and you can move your possessions in your own time without having to commit to a move date when you will be out of your current home.
- You can take your time. Without the pressure of a move out date, finding a new property can be done at your leisure.
- You’re in a strong negotiating position.
Disadvantages
The main disadvantage to buying before selling is a harsh reality – that the chances of being comfortably able to fund a new property without selling your existing home are low. You will also need to do your research to find out as much as possible about the stamp duty for second homes and can be subject to extra tax.
Should you sell before buying?
There is no right or wrong when it comes to buying and selling, with those able to sell before buying essentially completing the sale of their current property before going into a new property sale. This means that the sale of your current or old home will fund the new property.
Advantages
When you sell before buying, you become non-sale dependent – meaning that for the person selling to you, you are able to complete the sale without waiting for your own property to sell.
Another obvious advantage is that you have 100% confidence in your budget and ability to buy – with the money from your old property sale funding the new home.
Other advantages include:
- Because you are waiting until you have sold before buying, the pressure of selling quickly is removed.
- Your offer on a new property will be viewed favourably because you don’t have a chain to wait for.
- You won’t have any overlap in ownership, and so will not be subject to extra taxes or second home stamp duty fees.
- It’s easier to get a mortgage because you aren’t juggling two properties.
Disadvantages
The main disadvantage of selling before buying is that you may have to spend some time (and money) in rented accommodation, after selling your old property and while searching for and then waiting for completion on your new property.
Another disadvantage to be aware of is that when you haven’t found or chosen a new home yet, you don’t know how much you need to sell your old property for. You may end up selling for less than what you need for your dream home.
Buying and selling at the same time
If you decide that you can’t put one side of the process ahead of the other, you may decide to approach buying and selling at the same time. This means linking the two into a property chain – essentially a chain of transactions where the sale of one property allows the purchase of another. This chain generally starts with someone who is buying as a first time buyer or as an investor (essentially someone with no chain) who finances the seller’s own purchase, and thus pushes that financing up the chain to the final seller.
This chain may seem complicated but it is in fact the main way that homeowners are able to buy and sell smoothly and successfully.
The takeaway
There’s a lot involved in buying and selling a property, with our advice being to talk to your estate agent and determine the process which is most realistic for you, your lifestyle, and your budget.
