Sell before you buy?
Q: “We’re looking to downsize because we don’t need acreage anymore but we need to sell before we can buy. So do you recommend we sell our property first, and then start looking for another home?”
A: Good question. And the answer somewhat depends on your circumstances and for this reason we will always recommend you come have a conversation with us and we can point you in the right direction.
When selling or buying a home you really do need a team of experts around you and these include:
- A trusted Real Estate Agent
- A qualified and certified Financial Advisor
- A Conveyancing Lawyer
Let’s assume for the purpose of this Q&A session that you are still going to have a mortgage.
Option 1: Buy on Contingency
It is possible to request that a “condition” is added to the purchase Contract which provides you with an opportunity to withdraw an offer if your existing home does not sell within a stipulated timeframe. Be aware not all sellers will agree to this condition, but a lot do. This option is very workable if you already have a contract on your home, but even if you don’t you can discuss this as an option with your legal advisors.
Option 2: Sell Your Home First
Selling your existing home first is a good option for a number of reasons. Although there is still some juggling to do with this option, the benefits outweigh the risks. You can wait until you have a Contract on your property (or wait for the Contract to go Unconditional to reduce your risks) then start looking for a new home.
Bear in mind that most settlement* periods are between 30-45 days and this should be enough time to find another home. It can take a bit of juggling but your trusted Real Estate Agent can help you through the process and your legal advisors will know how to deal with any conditions on the Contract.
See more information and helpful tips on selling your home here
Option 3: Get a Bridging Loan
This option is not for the feint-hearted and if you absolutely must go this way ensure the shortest overlap period possible between buying a new home and selling your old one.
But if you absolutely must buy before you sell this loan allows you to use the equity in your existing home to help finance the purchase of the new one. You continue to pay the mortgage on your property until it’s sold and you pay interest only on the new home’s loan. Once the property is sold, the proceeds of the sale are transferred to the new loan.
Find out more about the types of home loans available here
It’s possible to make all of these options work with the assistance of a trusted Real Estate Agent and Legal Advisors.
Give us a call to discuss your situation and we’ll share the load to get you through the transition from old home to new home.
*Settlement periods: From the day the Contract is signed (by all parties) the Settlement Period begins. The length of the period is one of the clauses in the Contract and the vendor (the seller) has the ability to negotiate a period with the buyer. An average period in Queensland is between 30-45 days but it can be longer or shorter. Everything is negotiable.
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