For most Australians looking for a property downsize or upgrade, selling first may be a less risky choice. However, if you have enough equity in your existing property or on a regular income, it may better equip you to get the finance for your new property, providing your more room to move.
When Selling First Works Best:
- If you know that you will be able to locate something that fits your requirements or negotiate a long settlement.
- When property prices are flat or declining.
- If you are moving to a different location and buying in a slower and different market.
- If you are looking at greater certainty about how much you can spend on your next property.
When you sell before buying, it implies you may not be under the same time constraint for a quick sale, which can offer you more leverage when negotiating a sale price. It can also allow you some breathing space when searching for your next property, mainly if you arrange an extended settlement period.
But there are a few downsides to selling first, too. You would be under time constraints to purchase your next home quickly within the settlement period. It could also imply purchasing in different market conditions, which may go beyond your budget.
When Buying First Works Best:
Purchasing your new home before you sell your existing property typically works best-
- When you are ready to accept an offer that allows you to pay bridging finance or move on.
- When there is high competition in the market and property prices increase.
- When you can make it conditional on selling your property or negotiate a more extended settlement period on your purchase.
- When you are confident, there will be a massive demand for your current property.
In other words, buying a new property before selling an old one can be a reasonable strategy in a soaring real estate market. It enables you to lock in your purchase at today’s price whilst empowering you to sell your house at a date when prices are anticipated to be higher. Moreover, it gives you an option to find a suitable place before fully committing to selling your current one.
Making The Decision That Is Right For You
You can get a no-obligation consultation from our experienced investment property advisors in Adelaide who has a solid understanding of the real estate market. We can help you understand your equity position and home’s estimated value so you can make an informed decision.
