When it comes to selling a property, the age-old issue which you may face is should you sell or buy first? Timing, seasonality and market conditions are strong factors contributing to this decision.
In order to determine which strategy may be best suited to your personal circumstances, it is important to weigh up the pros and cons of each option.
The Pros and Cons of Buying vs. Selling First
- There is no need to apply for a bridging loan to finance both properties.
- You will know the exact amount of money you will have to put towards your next purchase.
- You will not have any urgency to sell, therefore you can wait until you are happy with the sale price of the property.
- You may be forced to rent until you find your next home – thus you will need to move twice.
- You may feel pressured to find your next home and rush your buying decision.
- You will have the certainty of only moving once.
- You can spend all the time you need to find your new home.
- You may be forced to obtain a bridging loan in order to finance the payments on both properties in the interim.
- Should your existing home not sell for the desired price, you may need to source additional funds to cover the shortfall.
- The burden of two mortgages could influence you to accept a lower offer.
When is the Best time to Sell?
There are factors such as market conditions and seasons which you should consider when selling your property. These factors at times can't be controlled but may influence the sale either way, so it is important to consider each carefully. However, ultimately the timing of selling your home will largely depend on your personal circumstances and needs.
Each year tends to have similar trends:
• Spring sees the most sales occurring, where October and November are the peak sales months.
• Autumn is the next most popular season with strong property sales.
Although there are seasonal fluctuations, these must be considered in tandem with market conditions to determine the best time to sell.
A seller must understand what state the market is in and how it may impact the sale price of a property.
Interest rates are the primary concern for home buyers - researching where rates will likely be headed in the next few years is essential to understand what you can afford if rates turn against you. Market conditions may change due to many other factors such as employment rates, the rise in cost of living, etc. Understanding how these affect the market at the time is important.
This exists when demand for homes exceeds the amount of homes which are available for sale, whether city-wide or regional or by suburb. In this market you will be able to ask more for you property than you normally may expect. Always be willing to start lower and let the market price your house for you, since initially overpricing your house can have a negative impact on the final result that you will achieve.
This exists when the number of homes for sale is greater than the number of buyers. In a buyer’s market, it is imperative to ensure your price is realistic, and understand that it make take a longercto sell, and ensure you work with your real estate agent to maximise your selling price.