Buying and Selling Property

If you intend on buying and selling your property at the same time you need to make sure your file is handled by a competent professional.  This type of transaction requires careful planning and consideration to ensure both your sale and purchase settle on time.

As most people cannot afford to buy a property in cash,you will be reliant on the funds from your sale to finance your purchase.

If you are wondering which order will work best for you, here are some Pros and Cons for both options:-

Selling First

Pros

• you can wait until the right price is offered on your current property
• you will not require bridging finance
• you can determine how much you have to spend on your new home
• you can arrange an extended settlement to give you the time you require to find another home

Cons

• you might not find your next home before settlement and may need to rent and move twice
• property prices may increase while you look for your new home

Buying First

If you buy before your sell your current home, you:-

Pros

• will only need to move once
• can wait until you found the right home

Cons

• might have to get a bridging loan (finance owning on two properties at the same time)
• have to guess what the value of your current home is when working out the budget of your next home
• may buy something you can’t afford
• may be forced to take a lower offer on your current home so you can sell your property in time for settlement

Bridging finance is different to other home loans as they tend to have shorter terms i.e. 6 or 12 months and are more expensive.  Whether you pay slightly higher interest on your bridging loan will depend on your situation and how risky the lender considers it to be.  Aim to borrow less than 80% of the value of both properties that way you can at least avoid paying Lenders Mortgage Insurance.