It’s Safer to Sell Before You Buy a New Home

Many homeowners are looking at the upgrading opportunities presented by the current market and making offers to purchase bigger and better properties before they have even listed their existing homes for sale. And there are of course certain advantages to buying a new home before you sell the old one, says Berry Everitt, CEO of the Chas Everitt International property group. These include the fact that you know where you'll be living next, when you can take occupancy and how much you'll be paying. “Buying first also usually means you won’t have to move twice. Many repeat home buyers have had to move to an interim rental property because they couldn’t find a replacement home by the time they had to turn their existing home over to the new buyers.” However, he says, this really may not be the wisest approach. “For a start, there’s a good chance that it will take longer to sell your existing home than you anticipated it would, and that you could end up being liable for two home loan instalments a month. “Such double payments can add up remarkably quickly, and then you would probably feel pressurised to lower the price of your old home just to achieve a sale.” Writing in the Property Signposts newsletter, Everitt says it is best to do some homework before making any decision. “Find out the current market value of your home from reputable estate agents in your area and quiz them about market conditions. Is it a buyer's or a seller's market in your suburb? In a hot seller's market, the chances of a quick sale are much higher than in a soft buyer's market. “You should also establish whether there any problems with your home that could make it difficult to sell. Is it located across the street from a noisy school? Is it next to a busy freeway? Does it lack a garage or a second bathroom? Is the floor plan awkward?” Armed with this information, he says, you will be better able to assess the risk of buying first. If it's likely that your home will sell quickly, it may be worth the risk of buying before selling. But if the marketability of your home is questionable, you should really consider taking the more conservative route of selling before buying.