When it comes time to move property, should you sell first and buy later? Or find something first and then sell? What are the pros and cons of buying and selling at the same time? Well, it really depends. It depends on your circumstances and motivation; both financially and personally, and whether or not you are buying and selling in the same location, meaning within same local market environment.
Advantages of selling and buying at the same time:
• Security/Certainty – you already have secured somewhere to live, there’s no uncertainty or transitional period.
• Cost Saving – you won’t be wasting money renting in the interim, and will avoid the cost of moving twice, plus the costs associated with bridging loans if you purchase before you’ve sold.
• Market Conditions – you are buying and selling in same market, therefore the health of the market isn’t as important, for example if you sell in a declining market, but buy in the same market, you may have received less for your property than hoped, but you will also be paying less to secure your new property. In a buoyant market you will be paying more, but you will also have received more when you sold.
• Peace of Mind – in a booming market where property is selling quickly you may find yourself in a situation where you can’t find anything you like available for sale, plus in a booming market prices can escalate quickly…in this type of market you certainly would benefit from buying and selling simultaneously to avoid having to pay more as the market continues to climb.
There really aren’t too many disadvantages, but the below is certainly something to consider:
• Market Conditions – if the market is at an absolute peak and the next movement is downwards (not always easy to predict), it may be worth selling your property now to maximise your profit and then renting whilst waiting for a decline before purchasing again. A declining market is a very popular time for savvy investors to purchase.
• Time – by selling first and renting, you are buying yourself time to find the property that really suits your needs. You don’t want to be rushed into buying a property – it’s a massive financial commitment, and if it’s going to be your family home…you want it to be right, otherwise you’ll be going through the expense of relocating again after a short period of time.
• Minimising Stress – whilst not having bought something when you’ve sold can be stressful, as you’ll need to find somewhere to live in the interim, it is infinitely better than rushing into a decision through a sense of urgency, that you may later regret. So, if you decide to sell and you truly haven’t found the ‘right’ property to buy, then don’t buy yet.