Which Comes First: Buying or Selling?

Most homeowners face the dilemma of buying a new house first or selling their current property. There is no direct answer since the right move depends entirely on your circumstances. 

However, we can offer some thought-provoking advice to help you find the answer. 

Firstly, there are a few strategic considerations you need to think about: 

• Do you need the sale proceeds to buy a new property? 
• How fast are properties selling in your neighbourhood? 
• Could you afford to pay two bonds simultaneously? 
• Do you have a plan for accommodation if your house is sold before you buy a new one? 

These answers will help narrow down your options. Now, let’s look at the advantages and disadvantages of each choice. 

1. Selling First 

 This may seem like the obvious choice, but it does come with a few considerations. 

Cons

• You may need temporary housing: If you sell your house without a backup plan, you may not have a place to stay. You may have to consider rental costs or navigate moving disruptions. 
• Rushed purchases: You’ve sold your house, great! But now, where do you go? You may be tempted to purchase the first available property just because of the timing, instead of actually buying the home you want. 

Pros 

• Financial clarity: Selling first means you know exactly how much you can spend to buy your new forever home. 
• Improved negotiating power: Approaching a property sale with cash or already being bond-approved makes you an attractive candidate for purchase. 
• Won’t have to pay two mortgages: This completely reduces the risk of having to pay two bonds at the same time, if it’s not in your budget. 

2. Buying First 

This may be your best option if you have financial flexibility, but it is still a risky situation to navigate. 

Cons 

• Loan challenges: If your debt-to-income ratio is not favourable, it may affect your ability to secure financing to buy and move into your new home.  
• Risk of shortfall: If you’ve overestimated your sale price, you could end up selling your home for less than expected, which can have negative effects. 
• Financial strain: If selling your old property is delayed significantly, you may have to pay two bonds. 

Pros

• Efficient move: Moving is a stressful experience, but ensuring a seamless transition from your old home to your new one will ease some of the burden.  
• Less pressure to purchase: You’ll have ample time to choose the right property instead of making a rushed decision. 

These are just some general things to consider, but expert guidance is always crucial. Partnering with a skilled Property Practitioner can help time both transactions effectively.