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Should I sell my property first before buying my next?

October 23, 2023

When contemplating an upgrade or downsizing in your housing situation, it's essential to weigh the pros and cons of different strategies for buying or selling property with your local Raine & Horne agent. Let's explore a "sell-first" approach initially.

Selling first has advantages

If you can negotiate a delayed settlement period for the sale, extending beyond the typical 42 days, it can provide you with the breathing space needed to find your next home and move into it before finalising the sale of your current property. A longer settlement period reduces the pressure to find a new property quickly and prevents potential buyers from taking advantage of your urgency to sell.

However, if you are very particular about finding the perfect next home, an extended settlement may not solve the issue. In such cases, you might have to resort to temporary rental accommodations, incurring costs for moving your belongings and weekly rent.

There's also the possibility that property prices might increase after you've sold your current property, which might be an issue for those looking to upgrade, as a sell-first approach exposes you to market fluctuations.

On the other hand, if you opt for a "buy-first" strategy, you can avoid the inconvenience of moving into rental properties and paying for multiple moves. Additionally, this approach provides you with more time to find the right property without rushing.

However, buying first may necessitate a "bridging loan" to finance your new property and manage mortgage payments on your existing property. Bridging loans typically cover homeowners for short periods, usually up to 12 months, and lenders often require security over both properties until the original property is sold and settled. Various arrangements exist for these loans, with some lenders allowing borrowers to add interest payments to their existing loan to alleviate immediate financial pressure.

For more information about bridging loans, please contact a finance specialist from Our Broker today on 1800 913 677.