With current property market conditions leaning strongly in favour of buyers, sellers may wonder what the best approach is when selling their home to acquire a new property.
It’s the age old debate; do you sell first and then look for a property to buy, or do you buy first and then hope to sell your property quickly? “There are pros and cons to consider for each option,” says Anita Griesel, Property Consultant at Jawitz Properties Durbanville. In an ideal world, once your home is sold, you will soon find somewhere new to live, buy your new home and everything will go smoothly. However, in the real world and in the present property market, this is not always how things play out.
If you choose to sell first, you’ll have cash in your pocket to buy again and you will have a clear indication as to what you can afford. When you find a new property to buy, you will be able to make an offer that is not subject to selling your property, and most sellers prefer an offer without any encumbrances. However, depending on how long it takes for you to find a new home that fits your specifications, and for the buying process to be completed, you may have to pay rent for a temporary residence.
If you choose to buy first, you will have a lot more time to look for a property without being under pressure, but you may struggle to find the property you are looking for as stock is tight at the moment. You will also likely have to make an offer on a new property subject to selling your home, which can make you a less favourable buyer.
Selling your property can take time, but if you can secure your new home, you will have somewhere to move into immediately once you do sell. “Each option carries risk, so plan carefully when deciding which one is right for you,” says Griesel. “You should look at various criteria both in your area and in the area where you’d like to buy. Look at recent sales figures, the average time properties take to sell, and how much interest buyers have in these areas.
“Be realistic about how much time you need to find a new home, as well as how much time is needed to sell your existing property,” concludes Griesel.
