When it comes to time to sell, whether to upscale or downscale, there is always the dilemma of whether to buy another property first, subject to selling the current home or to sell the existing one first and then buy elsewhere, says Michael Bauer, managing director of IHPC, a Cape Town based estate agency, which now also has offices in Gauteng.
No matter what the property market is doing, this can always cause some disruption and might be a stressful time, he said. In perfect situations, the current home is sold very quickly and then that frees up the capital to buy elsewhere without having to wait too long.
“Homes, however, depending on their price bracket and where they are situated can take some time to sell, and if you have put in an offer elsewhere there will be a time limit to sell before the agreement expires,” said Bauer. “The other drawback is that many sellers do not like to accept offers that depend on the sale of a property because that can delay their moving on to where they want to be.”
“The major benefit of buying first is that, although your property may take time to sell, once you have bought elsewhere you are able to move in immediately or as soon as you are ready.”
The benefit of selling first is that the money from the sale is available to make a “clean” offer on a new home, which most sellers prefer. If you are able to buy cash without any suspensive conditions, you are also in a better negotiation position when buying your new family home.
Anyone buying a home should take time to investigate all the options available to them and in some cases it can take up to a year to find a suitable replacement that fits all the current and future criteria needed by the family.
“The drawback here is that while trying to find a new home, the new owner of the current home will want to move in, in which case you will have to rent elsewhere in the meantime, which would then mean an outlay of a rental deposit and a double move. One move can be stressful enough, let alone having to do it twice in quick succession,” said Bauer.
Each has their own drawbacks and benefits but the key is careful planning, whichever option you choose.
When putting a home on the market, research the selling prices and times taken to sell properties to be sure the price asked is realistic and that the time it takes for properties to sell is an acceptable time to find a new home.
Likewise, when looking at the area to buy into, check the recent sales figures of comparable properties and be sure that area offers everything (or close to everything) that is needed for the family.
“The most important thing, though,” said Bauer, “is to be realistic in the timing and pricing of selling your home as well as how much time it will take to find a new one.”